World Vision's microfinance lightens burden of interest rates

In front of an increasing poverty, women of the western part of Rwanda decided to come together in cooperatives and started making savings on a small scale. Savings were used to provide loans to cooperatives members who want to initiate income generating activities.

Any loan contracted was reimbursed with an interest which goes up to 10% per month, depending upon cooperative members’ agreement. This interest rate was high. World Vision microfinance Vision Fund, recently joined them and supported with training in entrepreneurship. Afterwards, Vision Fund started awarding loans to Cooperative members to help them initiate income generating activities. Vision Fund came with an interest of 2% only.

‘’since we started working with Vision Fund, our initiatives flourished, and our cooperative keeps increasing its capital;’’ Clarisse Nyiransabimana, president of one of the cooperatives in Mudasomwa AP, Nyungwe cluster appreciates.

‘’ We are now imitating Vision Fund. People who come to us for a loan, pay 5% only, we have beaten down the interest rate’’ she explains smiling.

Every year now, Vision Fund plans together with cooperatives and gives them loans, once a year. Cooperatives members can decide to invest loan received together or individually. They can buy a land and farm together.For cooperative members who are caught in urgent needs when they have the only common income generating initiative, they can go to their cooperative savings for loans. With the decrease of the interest rates, members who used to pay 10% can now contract more than one loans;

‘’There is an improvement with Vision Fund’’ Speciose Mukarusagara, association member, selling vegetables, explains.

‘’Vegetables don’t give much return here, if you are using a loan that you have to reimburse with a high interest you lose’’ Speciose continues

She says to have seen an improvement in return, since interest from her cooperative was reduced. Vision Fund is planning to build capacity of more community members where World Vision Rwanda operates and link them to existing microfinances in each area, to help them come out of poverty through entrepreneurship.