Evaluation of Microfinance Services and Potential to Finance Forest Land Restoration (FLR) Investments Final Report Prepared by Azimut Inclusive Finance SPRL November 2016 Azimut Inclusive Finance SPRL TVA : BE 0555.784.066 www.azimut-if.com –
[email protected] Evaluation of Microfinance Services and Potential to Finance Forest Land Restoration (FLR) Investments Table of Content EXECUTIVE SUMMARY 3 1 CONTEXT 4 1.1 BACKGROUND 4 1.2 RATIONALE OF THE STUDY 4 1.3 SPECIFIC OBJECTIVES 4 2 FINANCIAL SECTOR AND REGULATORY ENVIRONMENT 5 2.1 BRIEF OVERVIEW OF THE FINANCIAL SECTOR IN RWANDA 5 2.1.1 FINANCIAL SERVICES PROVIDERS 5 2.2 THE MICROFINANCE SERVICE SECTOR 7 2.2.1 THE CONCEPT OF MICROFINANCE 7 2.2.2 THE MICROFINANCE SERVICE PROVIDERS 7 2.2.3 THE INFORMAL SECTOR 8 2.3 FINANCIAL INCLUSION 10 2.4 RELATED POLICIES AND LAWS 12 2.4.1 POLICY ENVIRONMENT 12 2.4.2 MICROFINANCE POLICY, LEGAL FRAMEWORK AND SUPERVISION 13 3 MICROFINANCE PRODUCTS AND SERVICES AND FLR EFFORTS 15 3.1 EXISTING PRODUCTS AND SERVICES 15 3.1.1 COMMERCIAL BANKS 15 3.1.2 MICROFINANCE INSTITUTIONS (MFIS) 19 3.2 ADAPTABILITY OF THE MICROFINANCE PRODUCT AND SERVICES TO SUPPORT FLR INITIATIVES (IN GATSIBO AND GICUMBI) 25 3.2.1 OPPORTUNITIES TO SUPPORT FLR INITIATIVES THROUGH MICROFINANCE INSTITUTIONS 25 3.2.2 CHALLENGES TO SUPPORT FLR INITIATIVES THROUGH MICROFINANCE INSTITUTIONS 28 3.2.2.1 Challenges related to the microfinance sector 28 3.2.2.2 Other challenges relating to the funding of FLR activities 29 4 RECOMMENDATIONS 30 FINANCIAL TERMS AND DEFINITIONS 35 ANNEXES 36 2 Evaluation of Microfinance Services and Potential to Finance Forest Land Restoration (FLR) Investments Executive Summary Rwanda has made international challenges, notably in terms of credit commitments via the Bonn Challenge to management policies, product restore 2 million hectares of degraded development, weak staff capacities and land.