Rwanda’s central bank urges MFIs to automate to reduce bad loans
The National Bank of Rwanda (BNR) has called on microfinance institutions (MFIs) across the country to embrace automation and reduce the rate of bad loans before the end of the year.
This will, according to Monique Nsanzabaganwa, the deputy vice governor central bank, help deepen financial inclusion and boost access to finance.
According to central bank latest statistics, non performing loans (NPLs) ratio for MFIs dropped from 9 per cent in December 2016 to 8.2 per cent the same period in 2017.
Equally, the level of bad loans among Umurenge SACCOs declined from 13.1 per cent in 2016 to 12.9 per cent in 2017.
However, according to Nsanzabaganwa, the sector could have performed much better only if these credit institutions had automated their systems and enhanced their loan recovery procedures.
“We are, therefore, working with all stakeholders to ensure all MFIs go digital by the end of this year so as to help reduce the level of NPLs and boost access to finance, especially in rural areas,” she noted.
Photo courtesy of Simone McCourtie.