A Rwandan microfinance institution that started when a group of 20 students at Kigali Independent University each began saving 100 Rwandan Francs (US$0.12) a day, has said that it has grown its capital base to almost US$200,000 in just six years.
With just US$6,300 in assets under management when the group officially launched two years ago, the Cycle Investment Co-operative has experienced a strong growth in capital and created seven permanent jobs.
“We wanted to provide financial services with a difference,” said Gilbert Banamwana, Managing Director of Cycle Investment Co-operative and one of the former students behind the initiative. “After understanding the country’s savings targets, we started mobilising other students, urging them to contribute to nation-building through savings. That is when we launched [the] ‘Rwf100 coin savings per day’ campaign.”
The cooperative was inspired by a 2014 national savings programme and financial planning sessions led by Rwanda’s Capital Market Authority. Capital is raised from cooperative members at around US$200 a time. Funds are then invested in stock markets and through other income-generating activities.
The cooperative, which focuses on creating income and employment among women and youth, enjoys partnerships with the Capital Market Authority, National Bank of Rwanda, and Rwanda Stock Exchange. Membership has swelled to 1,200, up 400 percent on the 300 members that subscribed to the cooperative when the it first opened.
Initially, the organisation had envisaged raising US$2 million in its first six years. As it continues to pursue growth beyond the capital Kigali, it remains to be seen how long it will take to reach this total, and how investor sentiment will be affected if, as the World Economic Forum expects, Rwanda’s economic growth slows to 6 percent in 2016.