Small loans in Burundi: savings cooperatives and licensed institutions

Burundian microfinance began in Gitega

The first COOPEC opened in Gitega in 1984 with support from the French Crédit Mutuel. The network spread across the whole country before being federated in 1997 by FENACOBU, which the central bank licensed in 2007.

Supervision by the BRB

Burundian microfinance institutions must obtain a licence from the Bank of the Republic of Burundi, which monitors their solvency and governance. They report information on their borrowers to the credit register managed by the central bank.

Cooperatives and microfinance companies

Alongside the COOPECs, funds such as the CECM and for-profit microfinance companies serve urban traders. Cooperatives are owned by their members, who vote at general meetings and must save before they can borrow.

Prior savings and member shares

Before a first loan, a COOPEC often asks members to buy shares and keep a deposit blocked for a few months. These savings act as partial collateral and prove the member's reliability before any money is disbursed.

Individual loan or joint guarantee

Joint-guarantee groups often bring together women traders or members of the same local association. Each member guarantees the repayments of the others, which replaces the land title or domiciled salary that a bank would normally demand.

What Burundian microcredit pays for

Loans are used to buy stock for a market stall, small livestock, farm inputs or a grain mill. The more structured needs of a formal business fall rather under business loans in Burundi.

Microcredit and the farming calendar

In rural areas, repayment follows the growing seasons and the sale of coffee, rice or beans. Products suited to growers, with deferral until harvest, are described on the page about farm finance in Burundi.

Public banks for women and young people

Set up by the state and the municipalities, the Investment and Development Bank for Women and the Youth Investment Bank fund projects run by cooperatives or associations, at rates presented as moderate and with support provided alongside.

Instalments paid via Lumicash or EcoCash

More and more institutions accept repayments via Lumicash or EcoCash, saving borrowers long journeys to the branch. The borrower should keep the SMS confirmations as proof of payment in case the money is wrongly allocated.

Rates and the cost of a small loan

A microfinance institution's rate is generally higher than a bank's, because amounts are small and monitoring is costly. Arrangement fees, insurance and blocked savings must be added together to find the real cost.

Stacked loans among Bujumbura traders

At the Bujumbura market and in small neighbourhood shops, some vendors borrow from several institutions to repay the previous one. The BRB credit register limits this stacking, but informal loans remain invisible and make hard situations worse.

The Tanzanian SACCO model

In Tanzania, SACCO savings cooperatives play a role close to that of Burundian COOPECs in villages and small towns. The page on microcredit in Tanzania makes it possible to compare the two networks and how they are supervised.

Getting a microloan from a COOPEC

1. Choose an institution licensed by the BRB close to where you work or to your hill.
2. Join by buying member shares and open a savings account in the member's name.
3. Save regularly for the required period before making a first loan application.
4. Present your project and its budget and, if needed, form or join a joint-guarantee group.
5. Sign the contract, receive the funds and repay on the agreed schedule, at the branch or by mobile money.

Cost of a microloan in Burundian francs

Documents requested by Burundian microfinance institutions

• National identity card
• Certificate of residence issued by the local administration
• COOPEC savings passbook or statement
• Project description and estimated income
• Joint-guarantee commitment signed by the group
• Communal land certificate if land is offered as collateral

Mistakes that sink a microloan

• Borrowing from a second institution to repay the first, a frequent spiral among traders in Bujumbura's markets.
• Using a loan meant for stock on a family expense, then running short of money for the first instalment.
• Joining a solidarity group with unreliable members, whose arrears fall on everyone else who stood as guarantor.
• Paying fees to a fake cooperative advertised on social media without checking its BRB licence.
• Ignoring the farming calendar and accepting monthly instalments when income only arrives after the harvest.

Lenders to contact

• Banque de Crédit de Bujumbura (BCB): Bujumbura commercial bank linked to the Bank of Africa group, offering banking services and financing to Burundian individuals and businesses.
• Banque Commerciale du Burundi (Bancobu): Burundian commercial bank regularly publishing activity reports and financial statements, providing banking services and loans to its customers.

Microcredit in Burundi in practice