On Tuesday this week, BK Group’s subsidiary, BK Capital launched a trust fund dubbed Aguka Unit Trust Fund.
This makes it the second unit trust fund in the local market after Rwanda National Investment Trust’s Iterambere Fund which was established by the government with a mission to promote and manage funds.
Such funds are an ideal way to drive up Rwanda’s domestic savings from the current about 12 per cent to the targeted 24 per cent by 2024.
Domestic savings are important as they create a means towards self-reliance, investment, growth as well as economic resilience.
Domestic savings will play an ideal role in further reducing the country’s reliance on aid as well as foreign financing to finance both public and private investments.
While increasingly, Rwandans have been making personal savings in bank accounts through the multiple products that have been set up by local operators, such savings by households and individuals in the form of cash or assets do not necessarily count as domestic savings.
Growth in financial savings instruments in Rwanda over recent years has not meant higher over domestic savings in the country
This explains why while statistics show that financial penetration which has grown steadily over the years to over 90 per cent and a growing section of Rwandans have financial savings instruments such as bank accounts, Saccos, and mobile money, the domestic savings rate has not grown much.
It is also common for Rwandans to invest by buying parcels of land in anticipation that they will appreciate in value over time and they can sell the parcels for more than they bought them.
This too, despite being popular does not qualify as domestic savings.
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