Country Director of CARE International in Rwanda ;

Representatives of Banks ;

Representatives of Microfinance Institutions ;

Representatives of NGOs ;

Dear participants ;

Ladies and Gentlemen.

It is a great pleasure for me to be invited as guest of honor in this seminar on Voluntary Savings and Loans Association(VSLA) organized by CARE International in Rwanda.  Even if I did not participate to the whole session, I understood trough your invitation letter that the major objective of the workshop was to inform participants about the three years project known as SAFI(Sustainable Access to Financial Services for Investment) and to explore strategic linkages between formal financial institutions and Voluntary Savings and Loans Associations. Referring to the workshop agenda, I notice, with interest, that you discussed on the VSLA  methodology in practice in Rwanda, the results of SAFI Project, the experience of linkages between BANQUE POPULAIRE and VSLAs, the success story of those linkages and the main challenges related to them. You discussed also on the possibility to expand those kind of linkages to other financial institutions and the opportunities related.

During my meeting last week with the Country Director of Care International, I understood that the introduction of VSLAs is not just an end in itself, but a methodology consisting to organize vulnerable individuals into Voluntary Savings and Loans groups in order to strengthen their livelihoods security. Moreover,  I heard that the usual targeted group is rural and poor people who do not qualify for accessing the formal financial services, mainly because they do not possess formal property to be accepted as a collateral by banks or formal microfinance institutions.

This approach is extremely important for a financial inclusion strategy.  Recent studies indicated that only 1 out of 5 rwandan has access to formal financial services.  Without a rapid change of such picture, it will be difficult for Rwanda to sustain a high growth rate, which is a necessary condition to significantly reduce poverty.

The VSLA, methodology offers a credible solution to the low level of financial inclusion in Rwanda.  Furthermore, this program is  a powerful tool to accelerate rural savings mobilization and to increase the financial literacy, empowering then the poor people in rural areas.  We congratulate CARE International for this innovation and do expect other NGOs to buy the product for a quick distribution all over the country.

Given the potential positive effect of VSLAs on the financial inclusion, linkages between VSLGs and financial Institutions is critical to build an integrated financial system in the country.  The VSLGs constitute, in my view, a golden opportunity for microfinance institutions and the banks to expand their clientele base.  To facilitate such linkages the law governing cooperatives, including SACCOs is being reviewed to allow for instance groups without a formal legal status to be members of financial cooperatives, such as SACCOs.

As the VSLGs members receive from their sponsors financial education focusing on the culture of savings and credit, the barriers which separated them from the financial institutions are broken.  It is important to note that the VSLGs are part the first category of microfinance institutions covered by the current legal and regulatory framework governing the development of the microfinance industry in Rwanda.

MFIs of this category require no legal status or licensing from the Central Bank to exercise their activities. However, they must register with the nearest local administrative entity, like a Cell. I hope the VSLAs supported by CARE International in Rwanda comply with this legal provision. The Law provides also indications for MFIs to move from a category to another.

I have no doubt that your workshop has generated more ideas on how to strengthen innovative solutions such as establishing strategic alliances between

Voluntary Savings and Loans Associations(VSLAs), MFIs and other financial institutions and finally the expansion of VSLAs in all districts,  which will significantly contribute to building an inclusive financial system in Rwanda.

It is on this note of optimism that I pledge full support of the Central Bank to this noble initiative.

I thank you for your kind attention.

==================================================