In May, the Ministry of Finance released findings of the 2020 Finscope study
which showed progress in financial inclusion with 93 per cent of the
adult population, up from 89 per cent in 2016. The adult population was
estimated at around 7.1m Rwandans (aged 16 and above)
The study, conducted by
Access to Finance Rwanda (AFR), was aimed at understanding the levels of
financial inclusion and identify the drivers and barriers to financial
access.
However, a deeper review of
the report showed the existence of challenges which financial sector
players such as banks could turn into opportunities which would deliver a
win-win scenario for service providers and their clients.
For instance, out of the adult population, only 36 per cent is formally banked and are using banking services.
This is about 2.6m Rwandans. While this is progress from about 16 per
cent 4 years ago, it is an indicator of a market that local bankers
could look into to deepen the quality of inclusion.
While much progress has been
achieved through non-bank avenues such as Mobile Money and Saccos,
formal banking would see more Rwandans not only able to make savings but
access the much-sought credit for investment and entrepreneurship.
A growth of formally banked
Rwandans would serve in response to low loan disbursement whereby only
494,000 Rwandans have a loan with banks,
Also, of concern was that
young adults between the ages of 16-24 years are more likely to be
unbanked and excluded, according to the study.
As banks seek to have a role
in the financial sector development, tailoring their products and
services to the context of the local market would increase the formally
banked as well as increase their clientele.
Some banks that have made
attempts to adjust their services to include digital and more accessible
services such as micro-digital loans have proven that there is an
opportunity amidst the challenge. For instance, digital loans which are
characterized by shorter processing time, fewer requirements and are
more convenient for low-income households facilitated the disbursement
of Rwf25.41 billion in 2019.
As we celebrate the progress in inclusion, financial sector players ought to use the findings to adjust relevance.
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