![[Rwanda] Savings and credit groups to be merged into a cooperative bank](Rwanda Sacco.jpg)
[Rwanda] Savings and credit groups to be merged into a cooperative bank
Plans to collapse all savings and credit cooperative organizations, SACCOs, in Rwanda into a cooperative bank are nearing completion with a view to offering centralized and improved services to members.
The project had initially envisioned creating a co-operative bank only comprising members of Umurenge SACCOs, community saving groups, but it will instead work as a commercial bank.
However, other co-operatives which are not SACCOs will also have shares in the bank. Investors, too, will be allowed to buy shares to enable it run effectively and efficiently.
“The special collaboration between the bank and the SACCOs is that SACCO members will withdraw and deposit their money anywhere across the country. They will not be limited to where their SACCOs operate as is the case now,” The minister of trade and industry (MINICOM), Francios Kanimba said.
Umurenge SACCOs will have over 50 per cent shares in the bank.
The minister added that one of the objectives of forming the co-operative bank is to ensure that Rwandans who access financial services through Umurenge SACCOs can be served as those with bank accounts.
The bank will connect members of SACCOs with other banks through a financial payment system which is linked to all banks and the central bank.
According to the minister, feasibility studies were already complete. He noted that the bank cannot be operational unless the use of information and communication technology in the SACCOs is enhanced first.
“We found out that the transformation of the use of ICT was paramount before the cooperative bank becomes operational. Our target is to ensure that by June 2016, all SACCOs will be using advanced ICT,” Kanimba said.
The cooperative bank will also play a critical role in facilitating the central bank to easily inspect 416 SACCOs across the country on a regular basis.
Under the new arrangement, all SACCOs countrywide will form one SACCO at the district level. This will minimize cases of financial losses and will not change the terms of services offered to members.
The micro-finance sector in Rwanda is comprised of 493 institutions, including 13 limited companies and 480 SACCOs of which 416 are Umurenge Saccos serving more than 1.8 million clients.
The sector plays a critical role in fostering economic development by offering financial services – particularly loans and opportunities for savings – to people with limited access to commercial banking services.
