From the presidency to the Central Bank, community financial groups or tontines are no longer welcome in Burundi. However, some people claim that they contribute to the development of families.
“We realized that certain people with bad intentions are hiding behind community financial groups to defraud the population. For example, there are individuals who were caught and who have already collected two billion Fbu, but paradoxically, they only had 200 million Fbu on them. No one else understood where this jackpot vanished,” declared the President of the Republic during the public broadcast organized on Friday December 29, 2023 in Kigamba commune of Cankuzo province.
Evariste Ndayishimiye advises Burundians to be careful of all people who take money from the population while offering reimbursement with a very high interest rate. He adds that no one is allowed to take citizens’ money for free, this phenomenon must be banned. According to the Head of State, people who are caught doing so will be punished and the money taken from the population will be returned to the latter. Only known banks and microfinance institutions are legitimate.
This declaration by the Head of State comes after the note from the Bank of the Republic of Burundi (BRB) made public on December 14, 2023, prohibiting the operation of community financial groups (tontines) or “ibirīmba”. The cause put forward by this bank is that some Burundians lose money to their colleagues who embezzle or squander members’ contributions. On top of that, there are no regulations on this.
The BRB measure was not unanimous in public opinion
Some greeted the measure taken by the BRB because they were victims of the theft of money contributed to community financial groups. But there are others who believe that said groups contribute to the development of the average citizen.
“The BRB should not ban ‘ibirīmba’, but rather their regulation is necessary. For what ? Because many citizens have limited financial means and do not have access to banks and microfinance institutions to borrow money. Worse, the interest rates that formal financial institutions offer to customers are very high, which is not favorable for everyone. »
As an alternative, the population uses community financial groups, explains Niyonsaba, a fifty-year-old from Cankuzo. Added to this are other administrative hassles such as guarantees. To demonstrate the advantage of the tontines, Ms. Niyonsaba says that she was able to build a house on her plot thanks to the contributions.
The phenomenon of community financial groups is observed in almost all the hills and neighborhoods of the country. Which demonstrates that the population has an interest in integrating this informal financial system. People who participate sometimes contribute less than 2000 Fbu weekly or monthly with the aim of accumulating a substantial sum of money after one or two years, in order to carry out certain projects.
“Community financial groups help us develop. Let the BRB review this measure and tackle the real problem, because in collaboration with the police, it is able to sanction, in accordance with the law, people who embezzle money from other members. Never mind, not everyone is in bad faith,” says Gilbert, a resident of Bujumbura. He explains how important community financial groups are in his life. “When I go to the bank to borrow even just 500,000 Fbu,” he explains, “I have to present a guarantor, without forgetting other administrative criteria that are difficult to meet. But when I ask for, for example, 1,000,000 Fbu within “ikirīmba”, I return with this sum the same day. » To close, Gilbert confides that he has been participating in this financial circuit for almost ten years and that he has not encountered any problems.
This example is not isolated, community financial groups help citizens to get by in small development projects. If the BRB regulated these groups, it would be an asset.
What do the experts say?
Gilbert Niyongabo, expert in macroeconomics, explains why the population prefers community financial groups: on the one hand, the enthusiasm for community financial groups can be explained by the problem of financial inclusion. In some localities, there are no banks or microfinance. The financial group is the only way that allows the rural community to save or benefit from credits.
On top of this, a large part of the population does not have access to financial services. Even mobile financial services do not inspire confidence. This is why many people use community financial groups to save money or borrow.
“We must not torpedo this dynamic by forcing them to create microfinance. Something difficult, if not impossible, for farmers who have few resources. Rather, we must create a framework that allows them to continue, while controlling the money in circulation. », suggests the expert.
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