Tue. May 18th, 2021

Rwanda Unveils Magic Behind Soaring Financial Inclusion

National Bank of Rwanda (BNR) which regulates and supervises the Microfinance sector since the law on regulation was passed in 2006

Rwanda’s Microfinance sector serves 89 per cent of the Rwandan population representing some 3.7 million according to the 2016 measure. Following many interventions the next measure which is scheduled 2020 might put financial inclusion at a two-digit number much closer to 100 per cent.  


The skyrocketing financial inclusion is public knowledge about Rwanda’s financial sector.  But, what had remained a mystery for some time to the world, especially economists from the East Africa region, not until officials from the National Bank of Rwanda (BNR) made it crystal clear is how the country has achieved the current startling financial inclusion.

Delegates at the concluded East Africa Microfinance Summit that ran under the theme: “Accelerating women and youth economic empowerment through financial inclusion” contended there were exhilarating ample lessons to draw from Rwanda’s experience on how it has managed to tap into the Microfinance sector to spur financial inclusion.  

In her keynote address Monique Nsanzabaganwa, the Deputy Governor at BNR unveiled the secrets underlying the fast growth of the Microfinance sector defined by swelling financial inclusion.

Nsanzabaganwa said her country had spared no efforts to deal with challenges that had proved a threat to the sector in 2005 when a bill regulating operations of Microfinance first came to the Parliament before a regulatory law was passed in 2006 following corruption that had found the sector a safe haven.

After passing the law on regulation, BNR undertook the regulation and supervision role of all the operations of the Microfinance sector, which constitutes savings and credit cooperatives.

Success was achieved through the SACCOs [Umurenge SACCO] programme, said Nsanzabaganwa.

In 2008 when Rwanda first measured financial inclusion 21 per cent of Rwandans were formerly included compared to 52 per cent who were totally excluded. Four years later, the results were amazing for financial inclusion had doubled.

Records at Rwanda’s central bank show that in 2016 when the latest measure on financial inclusion was conducted total exclusion had abated to 11 per cent with a gap of four per cent on total inclusion.

But, the country still struggles with a gender gap on formal financial inclusion currently rated at 63 per cent of women compared to 74 per cent of men.

However, several economic analysts say this is the smallest gap in the region.

To this effect, the Deputy Governor told the regional Summit that regulation of Microfinance was only one of the country’s efforts to raise financial inclusion.

Rwanda’s Microfinance sector serves 89 per cent of the Rwandan population representing some 3.7 million people according to the 2016 measure. Following many interventions the next measure which is scheduled 2020 might put financial inclusion at a two-digit number much closer to 100 per cent.   

Economists attribute this upward trend to establishment of the SACCOs and the arrival of the digital services offered by the telecommunications service providers like MTN Rwanda and Airtel Rwanda. 

However, analysts maintain that Rwanda’s strength over her counterparts in the region is derived from the introduction of law reforms that many didn’t think weigh a lot and/or had a bearing on the rising financial inclusion in Rwanda.

The new laws replaced those that categorically deprived women of their rights, including the right to inherit estate and open bank account unless they had secured permission from their husbands.

For instance, the succession law that gives a spouse the right to inherit half of the estate of the deceased and/or co-inherit the other half with their children or heirs is one of the laws that have made Rwandan women more bankable and financially included.

The succession law enacted back in 2016 protects the right of a surviving spouse to inherit property regardless of whether they have children with the deceased. The same legal privileges, also, apply to childless widows.

Under this law, both boys and girls are equal and hence share equal rights to inheritance of the estate of a deceased.

Joel Mwakitalu, the Coordinator of EAMFINET. Yengi Lokule CEO of RUFI (South Sudan) George Ombado, CEO of ACCOSCA (Africa), Marie Grace Mukandayisaba (lady in blue) the Vice President at SACCO ABIHUTA KINIGI – Rwanda during the concluded EAMS in Kigali (PHOTO/Eric Nzabirinda)

Subsequently, Rwandan women today have more access to funds including collateral loans because they own property like land that can be offered to commercial banks as collateral. This explicitly explains why Rwandan women, including widows are more bankable and such law reforms largely account for the swelling financial inclusion in the country. 

The government of Rwanda has repealed all the laws that deprived women of the right to own assets like land.

“(…) women can now own land as a matter of fact, women who’re married co-share the land asset with their husbands,” Nsanzabaganwa told the Summit.

Records obtained from Rwanda Land Management and Use Authority, added Nsanzabaganwa,  indicate that “about 58 per cent of the registered land is co-shared by husbands and wives while 24 per cent of the registered land is fully owned by women and these are mainly widows”.

Rwanda has also improved women’s labour market participation though a gap of about 15 per cent compared to men’s participation lingers on. 

Above 70 per cent of people who deal with financial services actually use an informal channel of a group somewhere, somehow, and 24 per cent of women use the savings groups for their financial inclusion, that’s huge, stresses Nsanzabaganwa.

According to an electronic map done by BNR, there are 47,000 savings groups mapped serving 1.1 million of whom 75 per cent are women.

On the youth, the government of Rwanda has massively invested in skills development through Technical and Vocational Education and Training (TVET) which in turn has made them


more employable and bankable.

Besides TVET, the Government of Rwanda in partnership with development partners launched and continues to support an Apprenticeship programme dubbed Igira Ku Murimo where unemployed youth graduates train in short-term courses like fashion and beauty, food processing, bakery, hair dressing, tailoring and sign language.

Sample notes of the Rwandan franc

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