The Transparent Pricing Initiative in Rwanda has published standardized pricing data from 14 microfinance providers, representing an estimated 90% of Rwanda’s microloan borrowers. Launched in 2011 the Initiative is delivered in partnership with Planet Rating and AMIR (Association of Microfinance Institutions in Rwanda), and is funded by the MasterCard Foundation.Microfinance in Rwanda
The Rwandan House of Parliament passed the Consumer Protection and Competition act in 2011. Due to the highly competitive nature of the Rwandan microfinance industry, this law is expected to play a pivotal role in protecting poor households and in increasing awareness about consumer rights.
The price graph presented below shows the prices of all the microloan products in the Rwanda dataset. Each data-point represents a real loan given to a real borrower, calculated using original loan documentation from the institution. The size of the data-point correlates with the number of borrowers that have a loan of that product at that loan amount. The color of the data-point correlates with the Transparency Index of the sample. The interactive legend beneath the graph can be used to change the graph axis and labels. Try the custom feature to see price correlations with attributes such as loan purpose, institution type, loan term and percent of gross national income.
The pricing dataset draws microloan data from a range of institution types; the majority of whom are cooperatives and non-bank financial institutions. A large proportion of the products analysed are designed for income generation purposes. The pricing data reveals a curve in the market average APR, showing that loans of a smaller size rise dramatically in price. The data indicates a strong correlation of loan products with lower prices being advertised with a more transparent price.
Individual lending is the favoured lending methodology employed by the Rwandan microfinance market, followed by solidarity group lending. Interest rates are quoted using both flat and declining balance calculation methods, with declining balance just slightly more common. The vast majority of microloan products were packaged with additional fees, insurance and other charges.
In this graph, the y-axis indicates the “Full APR”, defined by MFTransparency as the price including interest and all required fees, insurance, taxes and security deposits. This full price is then annualized with a nominal compounding procedure. For additional price calculations, please click on the institution name in the table below.
|Institution||# Borrowers||Portfolio (US$)||Products||Transp. Index||Participating Since||Age of Data|
|Vision Finance||14,226||3,474,646||6||50||2011-Sep||106 mos.|
|Zigama CSS||53,806||59,670,753||2||51||2011-Sep||106 mos.|