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On the 3rd of April 2020 the Savings Groups Practitioners Forum in Rwanda met through a webinar hosted by Access to Finance Rwanda (AFR) to discuss some of the effects they and their members or clients were facing as a result of the spread of Covid-19.
The Rwanda Savings Group Practitioner’s Forum began in 2013 driven by a need by institutions that promote Savings Groups, both local and international, for a forum where they could share learnings. It meets quarterly and has the support not only of AFR but also of the Ministry of Finance and Economic Planning (MINECOFIN) and the National Bank of Rwanda (BNR). One of the key successes of this Forum has been the creation of the Rwanda Savings Group Map hosted by the BNR https:// sg.bnr.rw. Efforts to ensure it stays updated continue.
Savings Groups and microfinance institutions remain key players in Rwanda’s financial sector serving a majority of the population. COVID-19 poses serious risks both health and economic because of restrictions on movement and gathering. As such effects of the pandemic are deeply felt by the clients and members of these institutions. Some of the key takeaways from the Forum’s meeting are shared below:
1. Clear and timely communication
There is need for the institutions serving these clients to communicate clearly on health and safety and the conduct of business.
2. Connecting members to other support structures
Members of SGs need to be aware of other available support structures such as in-kind food support by Government or well wishers and continued agriculture extension services available. During the lockdown agriculture production, manufacturing, sale and distribution of produce continues and as such many of these members will be busy in the farms or factories.
3. Operational challenges experienced by MFI’s on collection of payments and disbursement of loans
4. Lack of digital financial service offerings by the MFIs and SACCOs
5. New investments in building the capacity of the institutions and staff
6. Liquidity support for MFIs and SACCOs
7. Diversification of MFI loan portfolios
Participants pointed out the need for diversified loan portfolios well balanced between individual and group based lending. Most MFIs solely dependent on group lending are hard hit with some suspending operations at the moment.
8. Support through industry associations
Support through industry associations like AMIR is important at a time like this since they are able to collate the concerns of sector players and remain a voice for their members.
9. Standard Guidelines from the MFIs
Standard Guidelines from the MFIs to the SGs that they serve on what to do during the Covid-19 period could be useful as it would ensure all branch staff or loan officers are communicating the same message.