With the government’s plan of encouraging access to financial services, more so in the rural communities, Co-operatives have proved the perfect linkage to these previously desperately sought after services.
Since the turn of the millennium more than 5,000 co-operatives have been formed across the country as the government seeks to ensure all Rwandans are able to acquire financial services thus achieving its vision 2020 target.
In fact the success of these savings and credit cooperatives (SACCOS) can be underlined in the fact that some of these associations have now been formally classified as banks, a fact that states their vibrant growth.
Umurenge SACCOs is a Government initiative aimed at increasing the accessibility of financial services to Rwandan citizens. The concept of Umurenge Savings and Credit Cooperatives was based on an understanding that banks and other financial institutions were more concentrated in urban areas whilst the majority of the Rwandan populations live in rural areas.
Banks and other financial institutions were also not able to provide financial services that were ideal to serve the poor. Establishing a SACCO in every Umurenge was aimed at bridging this gap.
The objective was to encourage local citizens to use financial institutions to enable them to save and access loans and ultimately providing them with the opportunity to build financial security that would better enable them to manage financial shocks and to invest in business opportunities. This would, in turn, allow them to move out of chronic poverty and improve their livelihoods.
Francois Kanimba, the Minister of Trade and Industry said that majority of the people are now using financial institutions following the introduction of Umurenge SACCO.
“Cooperatives are considered as one of the best tools to speed up achievements in various national programs towards our Vision 2020,” the Minister said, adding that; ““Since 2005, our Government is committed to deeply restructure the Sector of cooperative development.” The minister noted while speaking to this reporter.
In a bid to ensure that these cooperatives work at a set government standard; the national Bank of Rwanda (BNR) is responsible for regulating them and providing licenses to these SACCOS.
“You do not want a situation where people are cheated by a cooperative,” John Rwangobwa the governor of BNR noted while giving reason to why the bank regulates them.
Such has been the great impact of these cooperatives that more than 3.2 million (72 percent) adults have registered with these associations.
Some of these cooperatives such as Inkudamahoro cooperative and Adarwa cooperative have expanded into large scale multi complex business owners.
But all is not rosy for the cooperatives as Nyamirambo’s women center co-operative, a cooperative made of women dealing in handcrafts can testify, “it has not been easy getting financial support for our kind of business,” Rose Uweera a member of the cooperative testifies.
But despite such hiccups the number of people being uplifted almost two million people out of poverty since their inception and one would deem the project a success for now.