• Mon. Jun 17th, 2024

The BRB measure of January 31, 2023 does not concern groups that carry out savings and loans activities


Mar 1, 2023

BUJUMBURA March 1st (ABP) – The Network of Microfinance Institutions of Burundi, (RIM) in collaboration with the Bank of the Republic of Burundi (BRB) and German Sparkassentiftung (DSIK) organized a conference on “The current challenges of the financial inclusion of women in Burundi”.

Maître Esperance Musirimu, a consultant in gender and rural finance who made a presentation on “The impact of the misunderstanding of the BRB measure of January 31, 2023 relating to community financial groups (GFC), with regard to savings and loans made by savings and loan associations”, recalled that women organized in associations have shown extraordinary strength in the microfinance sector. According to her, women have been at the base of spectacular social changes within the households, often with little means.

Nevertheless, they remain fragile insofar as they are made up of members who are often illiterate and do not always have sufficient knowledge to work professionally.

Regarding the measure taken by the central bank on January 31, 2023 to temporarily suspend the registration of community financial groups at the BRB, Mrs. Musirimu said that it was found that women were largely victims and sometimes actors of misinformation because of ignorance. Following that misunderstanding or misinterpretation of the measure, despite the BRB having provided clarifications relating thereto, inconveniences were noted within associations carrying out savings and loan activities. She cited the panic that has manifested itself within those associations, the withdrawal or attempted withdrawal of all the funds in their accounts in micro-finance with all that this entails as risks during transport home, disruption in loan repayments, unforeseen expenses and unplanned sharing, deposit of funds in unsecured places, destruction of some village savings and loan associations. Following those inconveniences, microfinance institutions have seen the deposits of community financial groups decrease significantly.

According to Prosper Ngendanganya, director of supervision, financial stability and inclusion at the BRB, what motivated the central bank to take the said measure is that it has been observed that certain community financial groups (GFCs) exercise the activities of collecting savings and granting loans to the public, have service points (Branches and Counters) located in different localities, open accounts and pay domiciliation, while their activities are limited only to the collection of contributions from their members and the granting of loans, according to the approach agreed in accordance with article 2 of regulation number 001/2018 relating to microfinance activities.

He did not fail to point out that no prohibition for tontines and CILCs not registered with the BRB and only carrying out activities between members, i.e., the collection of contributions and the granting of loans have not been subject to any prohibition decision.

That information was greatly appreciated by the women’s groups who carry out savings and loan activities, explaining that the BRB measure was misunderstood and that they will rebuild themselves and bring back their funds already withdrawn in their accounts found in microfinance institutions. The women’s groups also promised to explain those clarifications to other groups or their members who were not in the meeting.

Participants asked the central bank to consult partners before releasing a measure. The BRB was urged to avoid technical terms in its communications and to use games and other tools to popularize messages aimed at communities. Microfinance institutions are in turn asked to ease the conditions of access to loans for women so that they can actively participate in their economic empowerment.