Urwego Opportunity Microfinance Bank first-ever bank merger in Rwanda
Kigali, Rwanda, August, 07 2007 -
The world’s leading Christian organizations supplying microfinance and microenterprise development to the poorest of the working poor today announced a historic partnership by merging operations in Rwanda to open a microfinance bank for the poor in a country that is making steady progress and often great strides in rebuilding and reunification.
The Urwego Opportunity Microfinance Bank (UOMB) of Rwanda, headquartered in the central district of Kigali, will open a new banking hall using state of the art technology in early fall. The combined operation has offices in 27 of the 30 districts in Rwanda, more than 28,000 loan clients and over 3,000 savings clients. UOMB has $4.5 million in equity capital and a loan portfolio of $1.7 million. The partnership includes World Relief, a Baltimore-based agency that specializes in rebuilding communities in the aftermath of war or natural disaster. World Relief has operated Urwego Community Banking, the first and largest microfinance institution in Rwanda, since 1997. World Relief Canada and HOPE International have been financial partners in Urwego for several years.
"Microfinance has played a key role in building peace and reconciliation through trade as Rwanda continues to recover from the horrors of the genocide," said Sammy Mah, president of World Relief. "Ten years ago, while others focused on relief work, we led with microfinance activities believing that was the best way to overcome poverty, instability and conflict in Rwanda."
Opportunity International is the final leg in the partnership, bringing financial and technology expertise in the operation of the new bank. Over the next 12 to 18 months, UOMB expects to further expand banking operations across the country using innovative technologies to enable poor Rwandans easy access to safe and secure financial transactions.
Savings a critical component to economic growth, says Rwanda chief of staff
Dr. Ephraim Kabaija, former chief of staff to President of Rwanda Paul Kagame and currently the President's advisor on rural development, explained the critical need for a bank that offers savings accounts to the Rwandan people. "Do you know how many children die in our country every year because their mothers cannot afford the $2 - $10 needed to buy medicines to treat diarrhea, fever, malaria and other common illnesses? Do you appreciate how much angst, misery and despair we could eliminate from our country if every family had $50 in a savings account?"
Dr. Kabaija said that in Rwanda’s agriculture-based economy, most families grow cash crops and earn about $225 annually. "By making saving money more convenient and attractive, you will be the answer to many prayers," he stated. He also explained the benefits of transforming Rwanda from a cash-based to a savings-based economy. "We have studied new industrial economies in Southeast Asia – South Korea, Taiwan, Singapore and Hong Kong. Early in their development, they moved to a savings-led economy and today they have some of the highest individual savings rates in the world. Transforming Rwanda to a savings culture will not only provide a cushion for families and communities, but it will mobilize the capital of our people so it can be reinvested in businesses and municipal works and make us less dependent on the outside capital of others," Dr. Kabaija said. Opportunity International has opened 17 microfinance banks since 2000 offering not just loans, but a wide range of financial services, including savings and insurance. In most countries where Opportunityhas opened a microfinance bank, it is the first time that the poor have had the chance to put their money in an interest-bearing savings account.
Laurie Cook, CEO of World Relief Canada, said, "We believe that providing financial services to those who are entrenched in poverty is actually a matter of justice and an imperative for those of us who are blessed with more than our share of resources. What is being provided with this new venture is the opportunity for many to reach the first rung on the ladder."
Peter Greer, president of HOPE International, said, "The need in Rwandais significant. However, microfinance has proven to be an effective tool for addressing both physical and spiritual poverty in this country, and HOPE International is excited about the possibilities for the future of UOMB. This partnership has contributed to strength and growth for Urwego in the past, and the current merger to form UOMB will further enhance these efforts."
Dale Dawson’s dream for a bank in Rwanda
Ironically, this unique partnership did not begin in any of the partnering organizations, but with the dream of a former investment banker from Little Rock, Ark. Dale Dawson, a dedicated volunteer who today is chairman of the Opportunity International President’s Council, met Bishop John Rucyahana, a leading Anglican minister who has been working tirelessly on reunification of the Rwandan people since the genocide of 1994. "I was supporting Bishop John’s work at the Sonrise Schoolin Rwanda and I asked him what else I could do to help," Dawson explained. "He quickly told me that, while his school for orphans could provide superior education and business training, unless Rwanda had a better economy to provide career opportunities, his students would leave after graduation for America or Europe." In 2004, Dawson was introduced to Opportunity International. He asked President and CEO Christopher A. Crane what it would take to open a financial institution in Rwanda. Crane told him it would require several million dollars in donations to staff and build the bank, and to meet the minimum equity required by Rwanda’s Central Bank.
Dawson responded, "How soon can I start?" He immediately began working with the fundraising team at Opportunity International. Dawson also visited his business friends and, using all the skills from his career, helped raise several million dollars – in 90 days. During this time, Dawson was encouraged by friend and business associate Dabbs Cavin, a banker from Little Rock. In fact, Cavin joined Opportunity in Rwanda, where he has been preparing for the bank opening, recruiting and training senior management staff for the last two years. He was instrumental in creating the merger and is CEO of UOMB. Dawson, a member of the UOMB board of directors, expects that the microfinance bank will be a powerful catalyst for development in Rwanda. "We believe we can be a facilitator for other businesses and industries that are looking to invest here, and have hosted dozens of organizations already. We plan to be a contributing force and an institution that lasts forever in Rwanda ," he said.