Nearing Full Financial Inclusion, Rwanda Should Look to the Future

Nikhil Gehani and Joy Kim|Jan, 2017

In early December, MTN Rwanda announced it surpassed 1 million active mobile money users, a testament to the important contribution digital financial services (DFS) are making to inclusive finance. In addition to the sheer size of its user base, MTN Rwanda recorded over 7 million transactions per month, highlighting the impressive adoption of mobile money. The continued growth of DFS in Rwanda gives fuel to the government’s efforts to reach full financial inclusion by 2020. And with 89 percent of the adult population able to access financial services, Rwanda has proven its commitment to achieving this goal. However, reaching the remaining 11 percent of Rwandans still excluded from the financial system will not be a simple task. But with insightful analysis, thoughtful strategy and diligent monitoring, Rwanda has the ability to ensure all of its people can benefit from financial products and services.


There are indications that rural populations – often seen as the most difficult to reach – are gaining access to financial products and services. The 2016 FinScope Survey suggested that rural inclusion grew faster over the previous four years than urban inclusion, a promising sign for a country with a predominately rural population. Much of this was due to increases in mobile money adoption, as well as the growth of savings groups that are popular in rural regions. However, based on our updated Interactive Dashboard for Rwanda, there are opportunities to improve outreach and product offerings in these districts. For example, Nyaruguru has the highest savings rate at any Umurenge SACCO, despite the fact that customers must travel 51 minutes on average to reach the access point. (Figure 1) These customers may be traveling long distances to neighboring towns to meet their needs, while others may decide against making the trek altogether. With this information, there may exist an opportunity to stimulate demand by increasing the number of access points. Additionally, although there are more mobile money access points than savings groups in Rwanda, the distribution patterns of our data indicate the latter are more prominent in rural areas. (Figure 2) Therefore, even with the impressive growth of mobile money, reaching the remaining excluded populations will require the promotion of rural SACCOs. Here exists another opportunity: Traditional financial service providers (FSPs) should look for partnerships with groups already operating in rural districts to develop tailored products and increase outreach.


(Figure 1)


(Figure 2)


While Rwanda’s efforts have been focused primarily on the ‘unbanked’, now might be the right time to begin to shift the attention to the ‘underserved’. In the Nyarugenge district of Kigali City, the number of access points compared to the number of female workers indicates that demand is potentially constrained by limited supply or products not meeting market needs. (Figure 3) FSPs might consider catering specifically to the financial needs of this population segment and others to increase product uptake, improve marketing effectiveness and increase customer retention. FSPs can differentiate themselves by ensuring they are not only reaching underserved populations but also providing the most relevant and useful financial products and services.


(Figure 3)


As Rwanda continues to make impressive progress toward full financial inclusion, government and industry must keep their feet on the accelerator to reach the remaining households currently excluded. Rwanda should celebrate the progress that has been made but also acknowledge there are always ways to improve. On top of a thorough assessment of the remaining gaps in the financial services industry, the last mile will require innovative ideas and partnerships from all actors. Additionally, the next challenge will be to ensure the financial system is working to improve the lives of all Rwandans. We encourage you to visit the Interactive Dashboard for Rwanda to uncover insights that could lead to those improvements.