Community financial groups (CFGs) are scattered throughout the country. They constitute a means of access to credit, with the payment of a small interest which returns to the members in one way or another. But, what is the functioning of these small groups that strengthen the resilience of communities that do not have access to financial institutions. A few answers.
Not far from the capital of the province of Rutana, is Rongero, one of the hills in this province. To find out how the GFC Remember us first works, we went there. On a sunny afternoon, we disembarked in the center of Rongero, made up of a few houses that line the macadamized road. A fine reddish dust (inombe) covers all the houses in the area. A few banana trees, but not too many. Beans and some cassava drying in the sun. Everything is sweet, everything is calm. Life seems to be slowing down in Rongero.
Let us remember the itemit is more than 830,000 Fbu to have own
People look curiously at our small team that has just landed, but keep their distance. A few phone calls and our contact arrives. It is Béatrice, a smiling 22-year-old girl who welcomes us. She is responsible for Remember us first. Where to sit for a quiet chat? She kindly invites us to her home. In the backyard, cassava is drying in the sun. In the living room, a few bunches of bananas, but also benches and chairs, enough chairs because Béatrice has also invited some members of her group to “share the word”, as we say in Kirundi.
Remember us first is composed of 13 members all from Rongero (9 girls and 4 boys). But initially there were 18 of them, the other boys went to Tanzania. gupagasa ». This group was founded on March 21, 2021. Now it weighs 837,900 Fbu.
How it works ?
Group members meet once every two weeks to pool capital. The share of the capital ranges from 500 to 2,500 Bif, depending on the means of each. After the contribution of the capital, those which need credits make it known. Each member is entitled to a loan equivalent to 3 times the amount of their savings. This is followed by the distribution of the credits requested, according to the amount available. Reimbursement is made over 3 months. A 5% interest is applied and is immediately deducted from the sum, the beneficiary receives the rest. At the end of the year (cycle), they share the interests, but the capital (savings) remain in the cash, and reboot for a new year, indicates gente dame Béatrice.
Benefits?
Alice Munezero is 22 years old. She has been a member of the group since its inception. “If I was able to raise a pig, it is thanks to the credit of Twijukire iterambere”, she automatically answers the question of whether GFC has benefited her. She proudly announces that she has already been able to save 41,500 Fbu for the current year.
Thierry Igiraneza, 23, also feels like he bet on the right horse. In addition to raising a pig that will give birth soon, he was able to buy a small plot of land which he cultivates thanks to the activities of the GFC Remember us first. His savings? Beatrice quickly checks the group’s register: 40,000 Fbu for the current financial year.
« Distribution »the end of the cycle
Our pilgrimage to discover the GFCs also took us to Bwagiriza, an area of Butezi commune (Ruyigi province). Luckily, we fell just when the Rutegama hill group was closing its cycle. We call that “distribute”, i.e. the sharing of dividends. It is important to specify that the savings remain in the cash register. Except for those who want to permanently leave the group to whom all of their assets must be returned. The others share the interest generated by loans or other income-generating activities that members do together. Added to this are the penalties, because whoever is late or absent from the group’s activities receives a financial penalty, as Dismas Igirukwisha, 23, head of the sub-hill group told us. Nyakayi.
Proliferation of GFCs: the causes
“There are many GFCs on our hill. Here, in Nyakayi alone, we have 6, one of which has been dissolved. There are as many in Kabanga and more than 8 in Rutegama. Many of them join GFCs because they are a godsend for those who need small loans to get out of certain difficult situations quickly or who want to start a small business,” said Niyongere Mélance, the head of Rutegama Hill.
GFCs, a form of resilience to the problem of non-access to financial services? The rate of financial inclusion in Burundi is very low compared to the rest of the world. This is what we read in a study made by Viscount Nkunda on behalf of Outreach Canada. “The 2012 national survey on financial inclusion revealed a rate of 12.5%, or 3.7% of the adult population who had an account in a bank and 8.8% in a microfinance”, mention this study. The author also highlights the fact that the adult population entirely excluded from the formal financial system represented a proportion of 73.3%. This means that 14.2% of the adult population are in informal financial systems.
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