Use of technology would spur MFIs performance

Microfinance Institutions-MFIs performance would   increase their penetration to   bank the unbanked and   spur financial inclusion if they continue adapt to   the use of technologies in service delivery, experts have said

Microfinance Institutions have been vital in    channeling credit to rural folks who   mostly ignored by    commercial banks, but   they are at times   constrained with   low   use of technologies such e-banking systems.

“We need to embrace technology so that we can increase   on our service delivery as well as accountability,” said Jean Marie VianneyNzagahimana, chairman of Association of Microfinance Institutions of Rwanda-AMIR

Most of the Microfinance institutions have not yet adopted electronic systems such as e-banking, linking to the national   platform as well as low use of internet which delays service delivery.

“MFIs look at these as expensive but they are   important in the long run. if clients are receiving better services will continue to bank with them (MFIs),” said  Rita Ngarambe, the association’s  Executive Secretary

Recently,   the association together with German Savings bank stepped up efforts to increase capacity within the sector, which saw efficiency and penetration in the underserved areas.

Nevertheless, the sector   is still facing   the challenge of   increasing the savings mobilization; this according to experts is attributed to   inappropriate products the MFIs put out   to the market.

“This is why we are   attracting more   MFIs to join the   Association so that now we can help them   address these challenges,” said Peter Rwema, the association’s in charge for programmes.

To achieve  its  ambitious target  to have    at least   80 percent  financial  included  by  2018, the government is looking at  the microfinance sector that include Saccos to  steer  rural   inclusion, something that will  increase liquidity  to lend to the private  sector.

The Microfinance institutions have been vital in extending credit to   the   small income earners mainly in rural areas who would not be welcomed by commercial banks.

Moreover, with   the country’s savings contribution to GDP stands at around 15 percent   against the continents standings of 20 percent, designing appropriate    products would help step up the percentages.

Iterambere

UM– USEKE.RW