Rwanda’s government is accelerating its plans to transform the country into a cashless economy and achieve 80% financial inclusion by 2017, joining the ‘Better Than Cash Alliance’, an initiative within the development community for the adoption of electronic payments.

According to a 2012 FinScope survey on Rwanda, 72% of the adult Rwandan population had access to financial products and services through both formal and informal sectors that year – a large increase from the 2008 FinScope survey, which reported 52% exclusion.

This positions Rwanda with one of the highest levels of financial inclusion in East Africa.

Advances in electronic payment systems in the country have been a key trigger in this trend – a process driven by Rwanda’s government, which now pays its salaries electronically and is committed to transition all government transactions to electronic forms of payment.

“We understand the crucial role ICT plays in all sectors of the economy, including finance,” said Claver Gatete, the Minister of Finance and Economic Planning. “This is why we have endeavoured to promote a cashless economy by digitising financial transactions.

“The Government conducts its business electronically, and we have put in place policies that encourage the private sector, especially financial institutions to embrace the use of ICT to champion financial inclusion and ensure that every Rwandan is financially included.”

Stimulating saving

At the same time, Rwanda is looking to elevate levels of financial saving in the country as well as access to formal financial products – areas that are still significantly underserved.

Around half of the population of Rwanda saves or invests in the form of non-financial assets, and while the use of formal financial products by Rwandans rose from 39% to 58% between 2008 and 2012, 66% of these individuals had continued to concurrently use informal mechanisms.

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Positively, alongside the mobile money services offered by MTN, TIGO, and Airtel, Rwanda’s banks – including nine commercial banks, four microfinance banks, and 491 microfinance institutions – attracted some 425,000 mobile banking product subscribers as of June 2013.

Mobile payments were carried out by over two million people (17% of the population) in June 2013, accounting for around 21 million transactions worth $200m, and a tighter integration of mobile money systems with financial products could prove to be a powerful tool for inclusion.

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“We commend the government’s leadership and commitment to continue transitioning away from cash, and providing the right incentives for the private sector to do what they do best,” commented Dr Ruth Goodwin-Groen, managing director of the Better Than Cash Alliance.

“While the opportunities of digital payments abound, getting there takes work and digitising payments is only achievable when a government articulates a clear vision, and leads the market to innovate, develop infrastructure, and create products designed to succeed.”

Ambitious in this regard, Rwanda’s government has also revealed the next goalpost beyond its 2017 target – already aiming for 90% financial inclusion within its ‘Vision 2020’.

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