Strengthening AFFs is a key to address issues pertaining to client protection
One of the key objectives of Vision 2020 is to transform Rwanda into a financial hub. In recent years Rwanda has witnessed a rapid growth in financial services generating significant benefits to consumers.
However, lack of awareness of financial services and how they operate still hinders penetration of those services to a large segment of the population thereby slowing down economic activities intended to contribute to poverty reduction. The situation worsens as individuals feel exposed to providers of financial services due to lack of awareness of their rights and obligations.
Financial awareness is increasingly becoming important, not only for investors, but consumers as well. It provides the public with the skills, knowledge and confidence to manage their financial resources effectively. It develops the culture of loan repayment and contributes to the financial stability of the system since the public is aware of the importance of loan repayment and the consequences of default.
The role of AFFs
AFF (Access to Finance Forum) is a Forum set up in each District to improve financial access. It is chaired by the Vice Mayor in charge of Finance and Economic Development and includes:
– Representatives of financial institutions operating in the District
– District Police Commander, District cooperative Officer, Representative of the Prosecution and Legal Advisor in District;
– BNR Inspectors in District
– Other stakeholders operating in the District
The objective of this Forum is to discuss and to address constraints encountered, both on demand
and supply sides, which are hampering financial inclusion in each district.
To insure that the mandate of AFFs is attained effectively, AMIR organized a one day workshop in Rulindo district to help AFFs members to feel the sensitivity and responsibility of AFFs vis-a-vis client protection and education. the workshop was massively attended by 82 participants from financial institutions, district officials and financial sector practitioners from Rulindo district. The workshop was graced by the vice mayor in charge of Finance and Economic Development in Rulindo district, Mr. Prosper Mulindwa.
AMIR’s representatives revealed that Rulindo showed up much interest and that they were very responsive and keen to know much about consumer protection and education; thus they requested AMIR to train the district officials and all AFFs members.
During the workshop, the Vice Mayor, Mulindwa reiterated that roles and responsibilities of AFFs are meant to help the forum constituents to work closely and put efforts together to eradicate non performing loans. He later added that the client protection awareness should help population/ clients to know their rights.
The workshop participants recommend that for them to perform well their duties there should be (1) coordination of the implementation of resolutions; (2) training at sector level for AFFs; (3) regular AFF meetings; (4) Advocy for the institutionalisation of AFF: drafting and approval of the law/regulation governing the AFF, in which responsibilities for each member should be clearly defined.
AMIR pledged to provide necessary support to AFF for smooth running of activities related to client protection and education. the Rulindo district have warmly welcomed the AMIR’s commitment by promising that managers of SACCOs shall also include those activities into their respective performance contracts.
“Rulindo district, in collaboration with AFF members, will be monitoring the extent to which financial institutions in the district comply with client protection principles and report back to the AFF in each meeting” District official said.