Extending the Outreach of Rwandan Peoples' Banks to the Rural Poor Through Village Savings and Credit Associations

This article explains the origins, mechanics and outcomes of a unique relationship established by CARE International in Rwanda. Applying its CLASSE-Intambwe methodology, the institution mobilized rural poor into savings and credit associations, and linked them to the vast network of peoples banks that exist in the country. This helped extend outreach of financial services to Rwandas poor, who have the physical capacity and skills, but lack investment capital. Preconditions for the methodology to work effectively are:

• Wide network of rural-based financial service providers, no more than a days walk from the borrowers;
• Competent and sufficiently funded NGO capable of creating, nurturing and training the institutional development of village associations and regional inter-group bodies;
• Enabling legal and regulatory framework that encourages such initiatives.

The article states that while the programme is in its early stages, initial results indicate that it is an effective way to integrate the rural poor into the financial mainstream. However, there is a need for additional research, especially in terms of costs versus benefits, to ascertain if it is effective once it attains greater scale.