Rwanda is one of the poorest countries in the world and has always been classified as one of the countries with the highest level of rural poverty. The key contributors to this include years of misrule and the Rwandan civil war and genocide of the early 1990s, which resulted in a massive destruction of the national social and economic fabric.
60% of the population lives in poverty while 87% of the population is rural and relies on agriculture, both for subsistence and revenue. The population has limited access to commercial bank loans and services due to being considered ‘unbankable’ or lacking the traditional collaterals. This in part has given rise to a growing Rwandan microfinance industry, which has been developing rapidly since the end of the civil war and the installation of the RPF-led government in 1994. This development is largely concentrated among NGOs and cooperatives, which have proven relatively successful, but it has not experienced the rate of growth nor the outreach required to match the high demand among low-income earners for a broad range of financial services.
Rwanda is ideal for MYC4's East African expansion due to its rapidly developing economy, improving infrastructure and effective government agencies. What is more, the government's explicit focus on Millennium Development Goals and exceptional success achieved along these lines in just a few years, make it an obvious choice for MYC4 and our mission.
Our first partner in the country, Rwanda Microfinance Ltd., offers a rare opportunity for MYC4 to enter into a country with a well-established, respected local player, who shares our values and fully understands the MYC4 mission. Rwanda's rapidly evolving infrastructure offers great potential for growth.
The Rwandan Franc is a relatively stable currency, trading within a narrow band around the dollar. The Rwandan Franc has depreciated against the Euro over the past year but the average annual rate of depreciation is below 3%, which is significantly less than those of the East African Shilling currencies. Rwanda applies a withholding tax on interests earned, which is applied to investors and MYC4 earnings.