The Impact of COVID-19 to the Microfinance Sector in Rwanda
Since early this year, the world is under a traumatic moment caused by the Covid-19 pandemic. To control and contain the epidemic; Rwanda implemented a range of containment measures including border closure, suspension of domestic travel, cancellation of public gatherings, institutions teleworking, and closure of schools, places of worship, and non-essential businesses. These measures worked well for Rwanda to contain the pandemic, as of 30 May 2020, Rwanda reported 370 cases of COVID-19 infection. However, these measures have negatively affected the livelihoods of many Rwandans, especially those who earn their living on daily basis. Furthermore, the measures also considerably affected the Microfinance sector which serves the majority of the Micro, Small, and Medium Enterprises (MSME and SMEs).
The Rwandan microfinance sector consists of 460 institutions, of which three are microfinance banks, 19 limited liability companies, 416 Umurenge SACCOs, and 22 non-Umurenge SACCOs. It should be noted that the microfinance sector serves nearly four million micro, medium, and small entrepreneurs (MSMEs and SMEs) in Rwanda, as per the Association of Microfinance Rwanda (AMIR).
In a bid to understand the impact and challenges faced by the Microfinance sector as entities during the COVID-19 pandemic, Access to Finance Rwanda (AFR) in partnership with the Association of Microfinance Rwanda (AMIR) conducted a rapid survey that aimed to assess the extent to which, microfinance banks (both national and international), as well as the SACCOs (both Umurenge and Non-Umurenge), have been affected by the Covid-19 lockdown.