The Savings Banks Finance Group of the German federal state of Baden-Württemberg promotes the project with the Sparkassenstiftung für internationale Kooperation (Savings Banks Foundation for International Cooperation) to establish a microfinance academy in Burundi with a financial contribution of EUR 130,000 and additional expert skills.
The project targets to professionalise and stabilise the microfinance sector in Burundi. In so doing, the basic supply of the population with credit, savings and insurance products will gradually be improved in Burundi, which is one of the poorest countries in the world.
Peter Schneider, President of the Sparkassenverband Baden-Württemberg, stated: “This project is an important contribution to come to grips with the manifold causes of flight of the population by solving the problems on site. Access to microloans gives many people in Burundi a perspective for an independent live.”
One of the causes of poverty is the lacking access to investment capital. Farmers are not able to cultivate their fields, because they cannot afford to buy seeds. Seamstresses do not have the financial means to purchase fabrics, carpenters are not able to pursue their business, because they lack the required tools. They all have in common that they do not get access to conventional loans, because they cannot provide any collateral or even have a regular income. As a consequence, they are not able to generate any profits. Breaking this vicious circle of poverty is the target of microfinance.
Today, microloans are one of the most important instruments of development cooperation. They give people the chance to make a living as craftsmen, farmers or traders according to the principle “help for self-help”. In most of the cases, the loans are extended to women, because they provide for the family and thus ensure a responsible handling of money. Furthermore, there are two special features working in favour of a reliable repayment of microloans: First, the borrowers are granted loans totalling some EUR 25 in their local currency. Only after this sum has been paid back, they are permitted to obtain higher loans amounting to EUR 50 or later on even EUR 100. Second, the loans are not granted to single persons, but to a small group of about five people: All group members are liable for each other’s debts, but more importantly, the next group member will only get a loan, after the first loan has been paid back.
According to current estimations, worldwide some 100 million people were empowered to escape the poverty trap thanks to the concept of microfinance, for which Muhammad Yunus, one of the founders of the Grameen Bank in Bangladesh, was awarded the Peace Nobel Prize in 2006. The concept still bears a lot of potential, but often the required financial means are lacking: The demand for loans is much higher than the capital generated through savings. Furthermore, microfinance institutions are only eligible to get money from the international markets, if they have achieved a high level of security and professionalism. To achieve this goal, sound education and training of staff is a core key.
The microfinance academy in Burundi
This is where the project of the Savings Banks Group of Baden-Württemberg and the Sparkassenstiftung comes in: Together with the microfinance network Réseau des Institutions de Microfinance (RIM) in Burundi both German organisations have been working on establishing a training academy for staff of the microfinance sector in Bujumbura, Burundi’s capital city, since 2012.
The East African country Burundi is one of the smallest African states. With a population of some 10 million and an area of 27,834 square kilometres, Burundi is just one third of the size of the German federal state of Baden-Württemberg. It counts to the three poorest countries in the world: More than 60 percent of the population have to live on less than a dollar per day. Considering the international safety index, Burundi is listed on one of the lowest ranks – and is even behind Afghanistan.
With 33 microfinance institutions (MFIs) of different sizes and organisation structures, Burundi can already draw upon a functioning and countrywide microfinance system. All these MFIs are connected to the microfinance network RIM, which has realized the problem of lacking qualification and training of MFI staff and is actively working on its improvement. To enable better education and training measures, it was decided on establishing a training academy, which is now implemented as a joint project. In future, training contents like an improved customer consulting, risk management or financial reporting will be imparted in a more standardised way.
Adams Sinarinzi, a local expert employed by the Sparkassenstiftung and co-financed by the Savings Banks Finance Group of the German federal state of Baden-Württemberg, is in charge of the planning and coordination of the academy. Sinarinzi was born in 1986 in Burundi. After his studies of economics in Uganda, he has worked in the microfinance sector of Burundi for eight years. His employment has proven to be a lucky strike for the project. Despite the extremely difficult framework conditions in Burundi, Sinarinzi has put in all his efforts into the project and is highly engaged in implementing the set goals.
The new academy has already started its training operations. As the future academy building is still under reconstruction, the education measures are currently being executed in rented training rooms.
Support from two experts from Baden-Württemberg
Adams Sinarinzi and the partner organisation RIM are supported on site by experts from the Sparkassenstiftung as well as by Julia Peylo and Prof. Dr. Dieter Gramlich, who were seconded to Burundi by the Savings Banks Finance Group of Baden-Württemberg as experts for project management, financial literacy and marketing. Since 2014, both experts have visited Burundi for three times to support the project with their expertise. They have developed core project tools, such as a financial plan and a business plan, a marketing concept and a concept for quality management.
“Our most important task is to ensure a stable and safe supply of the population with microfinance products”, Sinarinzi explains the overarching objective of the project. “To achieve this goal, we need better educated and trained staff, who are able to ensure a professionalised operation of microfinance institutions. This is where the work of our new academy comes in, and we are very happy about the active support from Germany.”
The commitment of the Savings Banks Finance Group of Baden-Württemberg
The Savings Banks Finance Group of Baden-Württemberg consented to support Sparkassenstiftung’s project for a period of three years. Today, on 27 September 2016, the Managing Board of the Sparkassenverband Baden-Württemberg (Savings Banks Association of Baden-Württemberg) decided to continue its project support for another two years until mid-2019.
“The commitment of the Sparkassen (savings banks) in Baden-Württemberg and of our network partners Landesbank Baden-Württemberg (LBBW), Landesbausparkassen (LBS – building societies) and Sparkassenversicherung (SV – savings banks insurance) is based on the partnership between the federal state of Baden-Württemberg and Burundi”, explained Peter Schneider, President of the Sparkassenverband Baden-Württemberg. “When we started this partnership in 2014, we were gladly willing to support the project launched by Sparkassenstiftung in Burundi in 2012 along with it. This project is an important contribution to come to grips with the manifold causes of flight of the population by solving the problems on site. Access to microloans gives many people in Burundi a perspective for an independent live”, Schneider said.
Up to now, the Savings Banks Finance Group of Baden-Württemberg has contributed a total amount of EUR 90,000 to the project. With today’s decision of the Managing Board of the Sparkassenverband Baden-Württemberg, another EUR 40,000 will be added. EUR 150,000 come from RIM’s own funds, some EUR 100,000 are contributed as project funds by the German Federal Ministry for Economic Cooperation and Development (BMZ).
Difficult situation in Burundi
The project in Burundi had to face a heavy blow and cope with a grievous loss in 2015. After the elections of summer 2015, the entire country was in turmoil. In November 2015, the Managing Director of the project partner RIM, Cyprien Ndayishimiye, was shot dead. The microfinance expert left behind a family of five own children and three adopted orphans of the civil war. For safety reasons, Sparkassenstiftung’s international and local staff were evacuated to the neighbouring country of Rwanda for a certain period of time. Meanwhile, the situation in Burundi has settled.
The work of the Sparkassenstiftung für internationale Kooperation (Savings Banks Foundation for International Cooperation)
Since 1992, the Sparkassenstiftung für internationale Kooperation (Savings Banks Foundation for International Cooperation) has been working all around the globe with the support of the German Savings Banks Finance Group (Sparkassen-Finanzgruppe), imparting the knowledge and expertise of the German Sparkassen (savings banks) in developing countries and emerging economies. “The professionalisation of local microfinance institutions, which have similar features like the German Sparkassen, through target-oriented and customised education and training of staff is a tried and tested concept”, explains Niclaus Bergmann, Sparkassenstiftung’s Managing Director. “Setting up qualified training facilities has proven to be a highly appropriate method. This concept has already been successfully put into practice in the neighbouring country of Rwanda and in other countries, too.”
The Sparkassenstiftung is currently executing 30 projects in 38 different countries. Sparkassenstiftung’s Chairman of the Board is Heinrich Haasis, the former President of the German Savings Banks Association (Deutscher Sparkassen- und Giroverband) and of the Savings Banks Association of the federal state of Baden-Württemberg (Sparkassenverband Baden-Württemberg).
Read here the article about the event of SWR (german language only).
An article about the event on Sparkassenzeitung Online is available here (german language only)
Watch the video about the commitment of Sparkassenverband Baden-Württemberg and Sparkassenstiftung für internationale Kooperation in Burundi here (german language only)
For further press information, please, contact:
Pressesprecher Sparkassenverband Baden-Württemberg
Am Hauptbahnhof 2, 70173 Stuttgart
Phone: 0711 – 127 – 77390
Mobile: 0172 – 3 63 80 24
Contact partner Sparkassenstiftung:
Annika Peukert / Carina Lau
Sparkassenstiftung für internationale Kooperation
Phone: +49 228 9703 6622 / 6608
Fax: +49 228 9703 6613