Language
Country/Area
No result found
How to make money in Burundi's microfinance sector? CECM's credit and savings strategy revealed!
As Burundi's economy develops, microfinance institutions are playing an increasingly important role in supporting low-income families and self-employed individuals. Caisse Coopérative d'Epargne et de Crédit Mutuel (CECM), a microfinance savings and loan bank in Burundi, has been actively committed to improving socio-economic conditions, especially the economic empowerment of women, since its establishment in 1995. In this article, we will take a closer look at CECM’s history, objectives, and how its financial products are driving the development of microfinance in Burundi.
History of CECM
CECM's history can be traced back to 1995, when it was founded by the Association for the Advancement of Women's Economics (APEF). Initially, the agency received funding from the Canadian NGO Development Internationale de Jardins, but the agency withdrew from Burundi in 1996. In 1999, CECM merged with APEF, marking the expansion of its business. By the end of 2003, CECM had more than 16,000 members, 75% of whom were women. Over the years, CECM has opened several institutions in and around the capital, Bujumbura, and has been accredited by the Central Bank of Burundi to promote credit and savings activities in microfinance.
“The basic principle of CECM is to accumulate savings before borrowing.”
Excellent financial services
The main objectives of CECM are to encourage individual savings efforts and increase financial support to low-income groups. CECM offers three types of savings products: current savings, term savings and savings specifically designed to finance specific activities. This move has enhanced the financial resilience of members, especially female members, and effectively promoted the improvement of their socioeconomic status.
“As of 2022, CECM has 6.4 billion Burundi francs in deposits and 6.2 billion Burundi francs in loans.”
Loan mechanism and social impact
CECM's flexible loan mechanism enables low-income groups to obtain the funds they need and disburses loans in a group format, which strengthens the group's sense of repayment responsibility. Loan amounts typically range from 100,000 to 200,000 Burundi francs, and interest rates are low compared to other traditional banks. In addition, CECM is an important source of funding for women self-employed entrepreneurs and small farmers, especially those struggling in the agricultural sector.
Innovative financial products
At the end of 2022, CECM launched a new product called "CECM Ni Akaravyo", a digital banking service designed exclusively for members. Through this service, members can easily withdraw money, make payments and transfer money on their mobile phones, further promoting the accessibility and convenience of financial services. In addition, CECM has also installed POS machines that use fingerprint recognition for transactions, improving the security and efficiency of transactions.
“CECM will continue to be committed to providing convenient financial services to low-income groups in order to reduce poverty and lead social and economic development.”
Strategies for dealing with funding needs
However, CECM faces the challenge of credit demand exceeding members' savings, forcing it to rely on external funding to meet demand. CECM maintains partnerships with several international non-governmental organizations to obtain necessary financial support. For example, the partnership agreement with Twitezimbere provides CECM with a guarantee fund to support loans related to income-generating activities. If CECM encounters difficulties in loan repayment, it can seek assistance from Twitezimbere.
Future prospects for deepening microfinance
With the changes in the economic environment, CECM's development potential is unlimited. It effectively makes up for the shortcomings of the traditional financial system for low-income people and allows more people to have access to financial services. As CECM continues to expand its business scope and product innovation, its influence in Burundi’s microfinance sector will become more profound in the future.
In this era of pursuit of financial freedom, can CECM's success story serve as a model for other microfinance institutions to help more people escape poverty?
