Rwanda targeting 80 per cent financial inclusion
In order to achieve the country’s economic transformation and poverty reduction, Rwanda has set its goal on increasing financial inclusion to 80 percent by 2017, through deepening and broadening the financial literacy of Rwandans.
This will be attained through the second Financial Sector Development Program (FSDP II), a five year program that seeks to develop a stable, sound and efficient financial sector.
The program will also include a National Financial Education Strategy (NFES) that will be integrated into the school curriculum and rolled out in communities to equip Rwandans with the knowledge, skills and belief to make and exercise informed, confident and timely money management decisions
“The purpose of financial education is to improve the financial capabilities of individuals so that they can make appropriate financial decisions, including what financial services they use, depending on their context or enabling environment,” Eric Rwigamba, the Director General of Financial Sector Development services (FSDS) said.
The FinScope 2012 survey indicates that up to 28% of adults (1.3 million adults) are still financially excluded. Although the country has managed to increase access to formal financial services to rural communities, the survey also suggests that available may not be responding to people’s needs due to the gap between the uptake and usage of formal products or services.
In the country’s quest for self reliance and dignity, during 11th National Dialogue Council, the Minister of Finance, Claver Gatete showcased the need for Rwandans to attain self reliance through adopting a culture of saving, personal discipline in daily expenses; even when there is evidence that savings and access to financial services have increased.
He suggested that Rwandans of all walks of life must learn how to manage their day-to-day cash flows and have knowledge on issues such as why save, how to save, when to borrow, how to manage credit and the risks of too much borrowing and the importance of making a budget.
In the state of the nation address 2013, President Paul Kagame also noted that banking activities and access to loans also made a significant transformation between September 2013-septemebr 2013 with an increase of 19.8% in financial activity and 13% access to loans.
In recent years, the focus has been put into the development of a stronger and more effective banking system, and the mobilization of the Rwandan population to save for the future.
This has been pursued by creating an appropriate environment and developing institutions that could provide access to members of the population who would not normally save in the formal sector and would generally not use formal financial institutions mainly due to proximity and deposit restrictions.
Apparently, Rwanda has experienced one of the fastest ever periods of socio-economic progress; over the last ten years the country has recorded rapid economic growth, reduced poverty by one million residents above the poverty line and poverty was reduced from 56.7% to 44.9%.