Urwego Opportunity Bank (UOB) is a commercial microfinance bank in Rwanda. UOB contracted MSC to determine the financing needs of the MSME sector in Rwanda. MSC was engaged to conduct primary research, improve UOB’s products, and thereby increase product uptake and profitability.
MSC helped UOB conduct a detailed market segmentation, develop products for MSME finance, formulate financial projections, define loan processes and procedures, formulate a credit-scoring model, and support the pilot test and implementation of the products developed. MSC’s intervention reduced the turnaround time of individual loans to MSMEs from two months to eight days. The average loan disbursed increased to USD 5,500.
At the end of the pilot, UOB financed 550 enterprises, with a portfolio of USD 1.66 million. OUB maintained high portfolio quality, with less than 3% non-performing loans. After the pilot test, the MSC team supported the rollout of the product across all branches in a phased manner. As of September, 2017, SME loans for UOB was about 38% of the overall portfolio, with 300 SME loan clients and a portfolio of USD 8 million. The PAR 30 days reduced from 29% in 2012 to 8%.