MICROCAPITAL BRIEF: Blue Financial Services Limited Warns Borrowers to Repay Outstanding Loans in Rwanda

Blue Financial Services Limited, a South African microfinance institution (MFI) that lost its operating license in Rwanda recently, has announced that it may take legal action against Rwandan borrowers who do not pay back outstanding loans. Rwanda’s central bank, The National Bank of Rwanda (NBR), reportedly agrees with Blue Financial Services’ insistence on collecting these payments. According to Theo Van Rooyen, Roaming Country Manager of Blue Financial Services, “It is important for our clients out there not to stop paying us because it will have repercussions” [1]. The specific repercussions of failure to repay the loans are not stated.

According to Blue Financial Services, the MFI had 800 borrowers in Rwanda with outstanding loans worth RWF 490 million (equivalent to USD 829,000). Blue Financial Services has reported assets of ZAR 1.5 billion (equivalent to USD 200 million).

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] Trading Markets. “Blue Financial Services Cautions Defaulters” on July 7, 2010. http://www.tradingmarkets.com/news/stock-alert/bfnlf_blue-financial-serv…

MicroCapital. “MICROCAPITAL BRIEF: National Bank of Rwanda (NBR) Revokes Blue Financial Services’ Operating License” by Julia Korn on July 13, 2010. https://www.microcapital.org/microcapital-brief-national-bank-of-rwanda-nbr-revokes-blue-financial-services%E2%80%99-operating-license/

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. https://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. https://www.microcapital.org/microcapital-brief-mayibuye-group-reveals-tu…

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

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

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