The microfinance sector has for long been plagued by poor credit culture, limited institutional capacity and unbalanced geographical distribution with the majority of micro-finance institutions (MFIs) located in urban and semi-urban areas.
Over 90 per cent of
However, this situation could soon be history following the launch of a E3 million
"The money will be disbursed to MFIs in two phases of three years each, and priority will be given to rural-based institutions," said Jonathan Nkoola, the MCF team leader.
Nkoola said MFIs that have been operational for more than three years and have a minimum of 3,000 active clients and a loan portfolio of Rwf1.5 billion will benefit. The institutions must also fulfill the
He said under the first phase of the project, they will focus on providing technical support and training, matching grants and funding women and youth projects.
"The initiative is expected to bring significant added value at the micro level by expanding financial services small businesses in the rural areas. The facility will also provide a positive impetus to the microfinance sector by helping professionalise and strengthen the sector," said KfW's
He added that the initiative will improve financial literacy and avoid indebtedness among low-income households.
"The fund will play a key role in bridging the refinancing gap faced by most MFIs in
"It is an excellent opportunity for capacity building and creating professional work within micro-finance institutions," Ngarambe added.
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