The National Bank of Rwanda (NBR), the central bank of Rwanda, recently reported that Blue Financial Services, a South African microfinance institution (MFI) with reported assets of ZAR 1.5 billion (equivalent to USD 200 million), has lost its operating license in Rwanda after operating in the country for three years, because of “fiscal fraud.” Details on the alleged fraud were not available at this writing. According to Blue Financial Services, the decision to pull out of Rwanda was made jointly with NBR [1].

Blue Financial Services has operations in 13 African countries, with a reported 800 clients in Rwanda. Though new loans will not be issued, the MFI will continue to collect outstanding loans from clients in Rwanda [1].

By Julia Korn, Research Associate

About Blue Financial Services:

Blue Financial Services is a South African microfinance institution operating in 13 African countries. It serves the formally employed yet underbanked populations. Blue is listed on the JSE Limited AltX in South Africa and the Botswana Stock Exchange. Blue reported assets of ZAR 1.5 billion (USD 200 million) at February 28, 2010.

About The National Bank of Rwanda (NBR)

Founded in 1964, The National Bank of Rwanda (NBR) is Rwanda’s central bank with headquarters in Kigali. It operates Rwanda’s Securities Exchange. Its purpose is to define and implement monetary policy; organize, supervise and regulate the foreign exchange market; supervise and regulate the activities of financial institutions (notably banks, microfinance institutions, insurance companies, social security institutions, collective placement companies and pension funds institutions); supervise and regulate payment systems; and mint and manage money. In 2009 NBR reported total assets of RWF 726.8 billion (equivalent to USD 1.23 billion).

Sources and Additional Resources:

[1] All Africa. “Rwanda: Blue ‘Financial Services’ Loses Operating License” by Berna Namata on June 8, 2010. http://allafrica.com/stories/201006080086.html

MicroCapital. “MICROCAPITAL BRIEF: South African Microfinance Institution Blue Financial Services Reports Significant Year-End Loss and Recapitalization, Loses Operating License in Rwanda” by Jennifer Shevock on June 16, 2010. http://www.microcapital.org/microcapital-brief-south-african-microfinanc…

MicroCapital “MICROCAPITAL BRIEF: Mayibuye Group Reveals Turnaround Strategy for Blue Financial Services, a South African Microfinance Institution with Presence in 14 Countries” by Jennifer Shevock on July 1, 2010. http://www.microcapital.org/microcapital-brief-mayibuye-group-reveals-turnaround-strategy-for-blue-financial-services-a-south-african-microfinance-institution-with-presence-in-14-countries/

MicroCapital Universe. Blue Financial Services. http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Blu…

MicroCapital Universe. The National Bank of Rwanda. http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The…

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