Jules Théoneste NDAHAYO, Managing Director at UFC in Rwanda, testifies on the way the Covid-19 crisis is managed on the territory and within his institution.

Can you describe the current situation in Rwanda?
In Rwanda, we have been confined since 21 March. Only essential services such as agriculture, trade in agricultural products, food and medicines, as well as financial services are offered. The country had just launched a large campaign for cashless, which means that most people, most of them MFI clients, have to visit MFI branches to withdraw cash in order to be able to buy basic necessities in these shops. They also have to comply with a number of health measures, including social distancing. The police ensure that these measures are respected by everyone.
 

How did you organize at UFC?
Our branches are still open, we still provide basic services such as customer services, withdrawals and payments as well as the granting of urgent credits only for customers who trade in essential products. All late credit repayment penalties have been cancelled and customers whose businesses have been affected by Covid will be able to have their credit repayments deferred for up to three months. In addition, UFC management is considering the possibility of providing a small bridge loan to customers before resuming repayments after the Covid. This will obviously depend on the availability and stability of UFC's sources of financing.

On the other hand, since movements are very limited, we have reduced our staff and introduced a shift between the different agents at branch level: three agents come to work one week and three others the following week. Staff at headquarters and the back office are working remotely and some are on leave. Opening hours have been reduced to better manage the situation.

We have also introduced sanitary measures. Cashiers in the branches must wear gloves and masks and maintain a minimum distance of one metre from the customer and between customers. Before entering the branch, clients and staff must wash their hands and use hand sanitizer that can be found at the entrance to each branch. Security guards are there to make sure this is done.

What is the main challenge to be faced?
There is a challenge at the level of savings groups, a methodology that most MFIs practice. It consists of bringing together about 30 people from the same area to make savings and repayments among themselves, after which one person from the group goes to the branch to make the repayments on behalf of the group. At the moment, even though some of the group's clients still have active businesses, they cannot get together to make a single repayment or to save. Moreover, the postponement of repayment terms recommended by the Central Bank (BNR) to banks and MFIs has been a pretext, including for clients whose businesses are still operating. Most clients have made withdrawals to build up a stock of food and ensure their survival during the lockdown, while there is little movement of remittances as most businesses have been closed. As a result, liquidity in financial institutions is gradually decreasing.
 

Is there any action at the government level?
Yes, the Central Bank (BNR) announced the postponement of credits for sectors whose business has been affected by Covid. There are very few repayments, only 20 to 25% of our clients come to repay their loans. Conversely, there are massive withdrawals, so our liquidity is gradually shrinking.

On the other hand, the Central Bank has limited the amount of withdrawals to 1 million RWF (980€) for banks and 500,000 RWF (490€) for MFIs. In its press release, it also reassured the community that there was no reason to panic because banks and MFIs will continue their activities during the period of containment.

Faced with all these measures, how do you communicate with your customers?
We have posted the press releases in the branches and are talking to the small number of customers who still visit. On top of that, we call some customers to find out about the situation in their businesses, especially those that are far away from the branches. We urge them not to panic.

In addition, UFC had just completed its pilot phase for Mobile Money/Push& Pull, allowing customers to make withdrawals and deposits to their accounts. They will thus have to make electronic payments instead of using cash, a potential source of contamination. If necessary, they will also be able to access cash payments via an agent of the nearest telecom companies. To do so, this service is automatically activated for those customers who live far away from the branches and wish to pay back, make a withdrawal or a deposit to their accounts. However, only less than 10 MFIs in Rwanda already have this service.

In terms of communication, people should be called upon not to panic, as the Central Bank has already done by publishing this message: "Don't panic, withdraw only the money you need immediately, use digital channels if these are already available in your MFI. If your business is still going on, continue to make movements on your account, if possible, and if your project is still asking for funds, do not hesitate to approach your branch to ask for an emergency credit. ».

Interview by ADA

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