The Savings Banks Foundation for international Cooperation (SBFIC) has for the last 10 years impacted positively on the economic livelihoods of millions of Rwandans through strengthening the microfinance subsector and developing the capacities of their customers in order to fast-track financial inclusion, generate employment and entrepreneurship opportunities for economic and social development.
This international cooperation which boasts of immense expertise and experience has presence in over 80 countries worldwide where it has deployed more than 2,000 Sparkassen employees working on project assignments and over 200 permanent to promote financial inclusion of the lower income strata. SBFIC that was founded in 1992 and stared operation in Rwanda in 2008 has implemented more than 200 projects globally.
SBFIC which promotes financial education among the Rwandans and vocational education for Microfinance staff and board members also focuses on the sustainable development of their partner organizations such as AMIR, RICEM, RCA und ULK. During a sideline interview at the fifth edition of the East Africa Microfinance Summit in the Rwandan capital Kigali, George Kalisa spoke to Maria Knappstein, the Country Director of SBFIC and Vumi Kacheche, the Head of Programme – Vocational and Commercial education Kigali. Below are excerpts.
Q: When did SBFIC start working with AMIR and how old is your project in Rwanda?
A: We have been permanently working in Rwanda for 10 years now and we have a partnership with AMIR from the beginning on.
Q: Which other East Africa countries do you have presence?
A: Burundi, Kenya, Tanzania and Uganda
Q: What is the core of your activities?
A: Our activities focus on both the demand and the supply side of the Microfinance sector. Together with our different partners, we work in the fields of financial education of the Rwandan population and vocational education for Microfinance staff and board members. Besides, our vocational education interventions target entrepreneurs, cooperatives and youths, who shall be supported in developing viable business cases (projects) that can be refinanced by the financial sector. Furthermore, through financial inclusion, the target groups eventually generate employment opportunities.
In addition to that we work with different governmental partners on the professionalization of Umurenge SACCOs, which includes their automation, their consolidation to District SACCOs as well as the establishment of a Cooperative Bank. It is one part of our institutional strengthening pillar, which furthermore focuses on the sustainable development of our partner organizations AMIR, RICEM, RCA und ULK.
Q: What is the relevancy of the ongoing EA Microfinance Summit vis-à-vis your activities?
A: The EAMFS is an important platform for sharing experiences and best practices in the Microfinance sector in East Africa.This year’s theme focuses on the women and youth economic empowerment through financial inclusion. Notwithstanding, Rwanda’s big financial inclusion achievements in the last years, there is still a considerable inclusion gap for women and youth. Therefore, the topic is of high relevance for us. Together with AMIR, we are working on overcoming this gap, e.g. through developing savings and loan products specifically for women or through youth financial education interventions for youths. We are happy to share those experiences and learn innovative methods from other countries.
Q: What is the objective of SBFIC programmes particularly in Rwanda?
A: The overall objective is to strengthen the microfinance sector and to develop the capacities of their customers in order to accelerate financial inclusion and to generate employment and entrepreneurship opportunities for economic and social development.
Q: Briefly explain the achievements of your activities in Rwanda.
A: SBFIC has improved financial education of huge parts of the Rwandan population, among others through annual celebration of the World Savings Week in Rwanda since 2011 and regular financial education campaigns for youths and adults besides accompanying AMIR in becoming a diversified service provider that represents broad parts of the Rwandan Microfinance sector.
We have established a vocational training center called Rwanda Institute of Cooperative, Entrepreneurship and Microfinance (RICEM), which is co-owned by AMIR as well as initiating capacity development programmes, such as practice oriented simulation trainings for financial services beneficiaries as well coaching for MFIs.
Other achievements include development and accreditation of curricula and training modules for RICEM, successful piloting of the dual apprenticeship system in the Rwandan Microfinance sector, development and roll-out of a microfinance product targeted to women which provides them loans without collateral, advisory for the professionalization of Umurenge SACCOs in terms of target sector-structure definition, core banking software selection, data cleaning and auditing, business process definition and business planning. And a successful review of the Cooperative Policy (passed in 2018) and Cooperative Law (pending approval).
Q: How many beneficiaries have benefited from your programmes?
A: Since we directly work with meso-level organisations like AMIR and RCA, we can reach out to a big number of beneficiaries. AMIR has around 350 members, and RCA supervises 416 Umurenge SACCOs. All those institutions and their customers benefit from our partnership programmes.
Q: What challenges have you identified since you started your operations in Rwanda and the East African region in general?
A: The Microfinance sector needs reasonable resources in order to continuously improve its services and reach out to new members, e.g. through digital solutions or capacity development of their staff. At the same time, the financial capacities of the target groups are limited. The interest rates in the microfinance sector are still very high, which makes the services hardly affordable to a lot of people and thus limits their inclusion as borrowers. It is a challenge to overcome this in order to improve the sustainability and inclusiveness of the microfinance sector at the same time.
Q: What is advice to the government of Rwanda and policymakers in particular?
A: The Government of Rwanda should continue to put a strong emphasis on the development of the Microfinance sector in various aspects such as the policy and regulatory level, since Microfinance is an important pillar for the socio-economic development of broader parts of the population.
Q: How do you rate the Microfinance sector in Rwanda in the East African region?
A: The Rwandan Microfinance-sector is well-organized. We have institutions in all-over the country, even in very rural areas. This is important for the financial inclusion, even in times of increasing digital financial services. Furthermore, a big advantage is the existing regulatory framework, enabling environment and supportive government policies for the microfinance sector.
At the same time, the existing institutions still have to work on better serving their existing customers and reaching out to the still excluded. This should happen from diverse angles, e.g. through developing needs-based products, professionalizing their procedures, an improved qualification of their staff and making use of innovative digital solutions.
Q: How does the growth of Microfinance translate in the improvement of lives of especially the poor, women and youth?
A: The growth of Microfinance translates into the improvement of lives of especially the poor, women and youth if it considers the special needs of these target groups. MFIs play the financial intermediation role necessary for off-setting economic livelihoods for low income groups.
For example, those target groups often do not avail conventional banking services, own tangible assets, suffer the notion that they are not bankable. It is the role of the microfinance sector to tap in this opportunity and respond to their financial needs with tailored services and products.