Rwanda: Poor Savings Culture, Lack of Financial Skills Dog Microfinance Sector

Print
 
Sep 2014
Rwanda, September, 17 2014 - Lack of financial skills coupled with a poor savings culture could be one of the main reasons non-performing loans in the microfinance industry are going up, sector experts have said.

The situation has forced sector players to seek more support and resources to promote financial literacy, arguing that these challenges could hurt the country’s efforts to achieve sustainable growth and Vision 2020 goals if they are not addressed.

“To attain a middle-income status, Rwanda must promote a savings culture and proper money management, especially among the youth and small-and-medium enterprises (SMEs) because they are the backbone of the economy,” Jean Pierre Uwizeye, the Association of Micro finance Association Rwanda (AMIR) director for capacity building and financial education, said.

Saving and financial management skills are essential for the SME sector to thrive, he added.

Froduald Munyankiko, the director Amasezerano Credit Bureau, said efforts aimed at eradicating poverty cannot succeed if the people do not save and re-invest.

“That’s how economies grow…Every citizen needs to understand the importance of saving and investment.”

The Ministry of Finance and Economic Planning recently rolled out a financial education strategy to promote financial literacy in the country.

The strategy seeks to boost the culture of saving and investment among SMEs, according to Eric Rwigamba, the director of financial sector development at the Ministry of Finance.

Sector players also want teachers to be taught basic financial education skills “because they play a big role in changing societal behaviours and attitude”.

Monique Niyongabire, head teacher Afla International Academy, said sustained financial literacy drives would help cultivate a saving culture among the youth besides equipping them with financial skills.

According to Claudien Nsengimana, CCOPEC Savings Co-operative boss, this will create responsible clients, especially among the youth, and eventually reduce the level of bad loans.
Recently, the National Bank of Rwanda said it will soon be rolling out financial awareness campaigns targeting consumers of bank products.



Source : The New Times
 

Research Analysis Tools

The fund indexes, institution benchmarks and other market information displayed here are all Symbiotics designed analysis tools, created in-house by our analysts and experts. Symbiotics has one of the oldest track records in microfinance investment analysis dating back to the late 1990s; its indexes and benchmarks have been regularly used as markers by investors, asset managers, financial institutions and practitioners. These, as well as several other research products, are available through the Research Account. Click on the link below to find out more.

Learn More