Private Sector Optimistic as New Lender ‘Iwacu Finance’ Enters Market | The new times

Members of the private sector hailed the entry of Iwacu Finance, a new no-deposit lender, which was officially launched on Tuesday evening and joined the country’s booming financial sector.

Iwacu Finance, which falls under the category of Non-Depository Financial Institutions (NDFI), is a micro-lender that was launched with a mission to help Rwandans prosper through rapid loans granted in a way faster than commercial banks on microfinance. establishments.

Speaking at the launch at Onomo Hotel, Innocent Higiro, CEO of Iwacu Finance, said that with quick loans, people will be able to fulfill their dreams and ambitions without having to wait long.

Private Sector Federation (PSF) Chairman Robert Bafakulera said Iwacu Finance’s entry into the market will greatly benefit the private sector as it still faces huge gaps in access to finance.

“Iwacu Finance has come to contribute to the socio-economic development of Rwandans and the country as a whole. We came up with the idea to establish it because we noticed that there was a lack of access to finance, especially among members of the business community who need quick loans,”

“You are a businessman and you want to clear your goods but you don’t have the money and you don’t have time to wait for commercial bank processes, we are here to fill that void and give you the money you want in due time,” Higiro said.

Iwacu, which is licensed by the National Bank of Rwanda (BNR) as a non-depository financial institution, is among the pioneers in the sector, which is mainly dominated by commercial banks and MFIs.

According to Higiro, unlike other banks, Iwacu Finance customers do not have to open an account or deposit with the institution, or provide collateral. Each case is assessed individually and the money returned to the client upon agreement on payment terms, at the same interest rate as other banks.

Iwacu will issue business loans, personal loans, agricultural loans and educational loans, among other products. Higiro said most NDFIs in Rwanda are owned by foreigners and Iwacu is one of the first NDFIs owned by Rwandans.

Speaking at the launch, Private Sector Federation (PSF) Chairman Robert Bafakulera said Iwacu Finance’s entry into the market will greatly benefit the private sector as it still faces huge gaps in access to finance.

“As the private sector, we are delighted to see the arrival of Iwacu Finance, which brings a new product that has not been heard much about in Rwanda. Business people will have access to loans without having to go through lengthy commercial banking processes,”

“This means that people will be able to access money quickly. We know that most members of the business community do not have the luxury of long waits for the bureaucratic processes of commercial banks. Iwacu Finance brings a quick and innovative solution to this challenge,” said Bafakulera.

The PSF Chairman said that Iwacu Finance not only came at the right time, it provides a much needed solution on access to finance that many companies continue to struggle with, especially after the Covid-19 pandemic.

“We encourage you to develop even more business products and spread your wings in the region, as it means you will facilitate business and trade in the region,” he added.

A booming financial sector

Ntoudi Mouyelo, Chief Investment Officer at Rwanda Finance, said the launch of Iwacu Finance marks a positive step for Rwanda’s nascent financial sector.

Mouyelo said that once new players join in, Rwanda will be well on its way to becoming a financial center not only in the region but also on the continent. Rwanda Finance manages the Kigali International Financial Center (KIFC), the first financial center in sub-Saharan Africa.

He pointed out that Rwanda Finance hopes to see more financial institutions like Iwacu emerge and join the fledgling financial center, which already has 40 members from Rwanda, Asia, the United States and Europe, which together represent more than 400 millions of dollars.

“It is very important to see more financial institutions born in Rwanda and we want to see more champions like Iwacu Finance boldly entering the market.

He said that with many players coming into the market, the financial center would grow in terms of membership and this would come up and companies would be direct beneficiaries with a pool of investment and funding opportunities to tap into. .

Mouyelo said that the private sector must take advantage of these financing opportunities which are well regulated to have quick access to finance, which also means that the financial institution grows, which is a win-win for all parties.

Improving access to finance for the unbanked

BNR representative James Rwagasana, who heads the NDFI supervisor at the Central Bank, said financial institutions that do not take deposits are key to attracting the unbanked, especially those who are turned away by the bureaucratic process of commercial banks and other conditions. .

“The latest FINSCOPE study by the central bank shows that at least 23% of people are unbanked but in fact have the capacity to be banked”,

“We believe that NDFIs can play an important role in reducing this percentage. Some people want quick cash to get things done without having to go through the commercial banking process and our job as a regulator, we want that to happen even on a larger scale,” Rwagasana said.

According to the BNR official, as regulators, their role is to intervene to play the role of consumer protection and also to ensure that the institutions also operate in a profitable manner, without any party exploiting the ‘other.

Higiro said agricultural loans are among the commodities because the agriculture sector, which is of critical importance to the country’s economy, faces many challenges in accessing finance as commercial banks do not confidence in farmers.

The loans will be granted to purchase agricultural tools such as machinery, storage facilities, agricultural resources and more.

“We believe that Iwacu Finance will contribute immensely to the growth of the Rwandan economy, as one of the pioneers of NDFI. Our goal is to serve the Rwandan community, primarily the underserved and business owners who need to take their business to greater heights,” Higiro added.

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