The governor of National Bank of Rwanda, John Rwangombwa has said that the government of Rwanda has committed to paying 75% of Rwandans’ money whose deposits were swallowed into loss-making micro finance institutions.
Rwangombwa said that people who had deposited with institutions which realized great losses in 2006 were paid 50%. He however said that clients of ICT and COJAD institutions which made losses later received no compensation.
He said this during the presentation of the monetary policy and financial stability today. Rwangombwa explained that the compensation fund is already allocated in the 2016/2017 budget, noting that the indebted will have been paid in two months.
“A law has been established, allowing for people who deposited in a financial institution which encountered loss later to be compensated. The compensation from this fund will not go beyond Rwf 500,000 per individual,” he said.
“It doesn’t mean the person who deposited millions will have his/her money since many financial institutions face losses. People should have good choices determining financial institutions in which their money can be kept. May be it is difficult for people living in areas with only one financial institution without other alternatives. However, when you decide to deposit in a financial institution, you have to know that you may lose something when there is a crisis,” he added.
He explained that they held talks with the Ministry of Finance and Economic Planning and the Ministry of Trade and Industry where the government decided to pay 75% of money people had deposited in financial institutions which faced losses.
Rwangombwa said that remaining 25% will be handled by depositors adding that the accepted 75% compensation has to be pulled from the budget.
“We hope people who had received 50% of their lost money will have more 25 % while others who received no compensation will get 75% not later than October,,” he said.