Micro-finance firms post record growth

Written by Patrick Fisher March 17, 2013 0 comment


Posted  Friday, March 1  2013 at  18:27

The microfinance institutions (MFIs) sector registered growth last year as a result of increased issuance of loans last year compared with 2011.

The sector’s growth is also attributed to impressive performance of Saccos that were launched in every sector as a campaign tool to have the rural masses access financial services while widening financial inclusion of the population.

The microfinance sector in the country comprises of 490 institutions of these 11 are limited companies.

According to the latest monetary policy and financial stability statement, the assets of MFI sector increased by 28.8 per cent from 2011 to 2012.

In 2011, the assets in the sector were worth Rwf77.42 billion while in the following year, the value of assets rose to Rwf99.69 billion.

The gross loans and deposits that were the main drivers of the growth increased by 44.7 per cent and 18.1 per cent moving from Rwf40.72 billion to Rwf58.9 billion and Rwf45.8 billion to Rwf54.15 billion respectively in same period.

The monetary statement also indicates that the Umurenge Saccos recorded a growth of 25.8 per cent in deposits, reaching 28.2 billion in 2012 from Rwf22.4 billion the previous year.

Loans for the Saccos also increased to 13.8 billion in 2012 from Rwf4.8 billion in 2012.

“Similarly, the financial soundness indicators of the microfinance sector indicated a significant improvement,” said Claver Gatete, then Governor of the National Bank of Rwanda, while presenting the monetary statement.

The non-performing loans ratio to the measure of asset quality also reduced from 12 per cent in 2011 to 8.5 per cent in the previous year.

The improvement in NPLs by the MFI sector, was mainly due to the good performance of the Saccos that recorded a NPL rate of 5.3 per cent in 2012 from 5.6 per cent in 2011.

The NPL for other MFIs besides the Saccos stood at 9.5 per cent as of December 2012, decreasing from 12.9 per cent in December 2011.

“The Saccos realised an impressive progress in terms of building their own premises and equipping themselves with necessary IT skills paving the way for their computerisation and consolidation process,” added Mr Gatete.

Besides the MFIs, the non-bank financial institutions comprised of insurance and pension sectors and they, too, registered significant growth.