Thursday, July 30, 2009

Microcredit for women in Rwanda

A microcredit effort operated by Rwanda's central bank focuses on making loans to women. Rwandan women who want to start up coffee shops, stores or agriculture business can apply at the countries banks for the loans.

The program started in early July and already some government officials say the selection process is not strict enough. With access to small loans being new in the country, some women do not have a business plan for how to repay the loan. The central bank says they will begin an education program for women to combat the problem.

For a further description on the new microcredit operation in Rwanda we turn to this snippet from IPS reporter Aimable Twahirwa.

The Rwanda central bank has established a mechanism of micro loans for all financial institutions that lend to female entrepreneurs. Loans for projects declared viable are against collateral guarantees, to be paid back over a long period.

Since the establishment of this new credit scheme early this year, at least 6,568 women have received assistance for micro- and small enterprises from the government, international donors and NGOs worth 890,000 U.S. dollars, according to the central bank.

According to Kanimba, many of these are associations that own both coffee farms and shops, for instance, in a new initiative to finance the reduction of poverty.

The associations "served as (one of) the main tools to address the multiple causes of poverty, unemployment and social exclusion especially in rural areas," minister Mujawamariya remarked. "Slowly but surely, the lives of rural women are changing following the new credit scheme," she told IPS.

But businesswoman Solange Uwimbabazi, who runs a shop at Nyabugogo market near Kigali city, insists that it is quite difficult for poor women to access credit in a situation where the process of allocation of loans by banks is far from transparent.

"There is discrimination," the entrepreneur, a mother of five, observes. "Some groups of women are excluded to benefit from loans. The wealthiest groups are considered the most," she adds.

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