As Inclusion Hub reported in its profile on Rwanda’s financial inclusion landscape, 42 percent of Rwandan adults own a financial account, whether formal or informal, and 1.6 million have opened accounts in the country’s national SACCO savings and loan program.
At the U.N. Sustainable Development Summit, Inclusion Hub spoke with Claver Gatete, the minister of finance and economic planning of the Republic of Rwanda about the country’s recent success.
Inclusion Hub: Rwanda has been achieving remarkable success expanding financial inclusion on a national level. What accounts for your success?
Claver Gatete: As a country, we have a vision that people are the key asset of our country. We are driven by our Vision 2020: our goal to become a middle-income country by the year 2020. To achieve that, we wanted to make sure that IT becomes a key facilitator in creating a service-led economy. To do that, we have to ensure that all the people were financially included.
Initially, we had a problem, as access to finance was very, very small: 21 percent, in terms of the formal inclusion. But once we admitted the problem, developing our own country to make sure that ordinary people can get access to finance has caught up very well.
Inclusion Hub: What are some actions your country took?
Claver Gatete: One thing we did was introduce micro-finance institutions, for example, our SACCO savings co-operatives, and made sure that these products grow, especially mobile usage.
We’re not only increasing the branches, but also making sure that we use agency banking and cards. This improves service. Services mean that the ordinary people don’t have to travel long distances. Meaning that you can purchase water using the mobile phone; you can purchase electricity using the mobile phone; you can purchase fertilizer. And at the same time you can also look at the weather; you can look at the prices, globally; you can know when to sell your produce. You can vote; you can get all the information you need in different sectors – economic, social, and also in democratic areas – so you can always get the information. The mobile phone has become a key enabler.
Inclusion Hub: What role does technology play? How have customers’ preferences and behavior evolved?
Claver Gatete: Rwandans are now really getting used to making sure they don’t have to go to different offices. For example, simplifying by centralizing paying taxes and other services. If you want to transfer money, you don’t have to go to any offices; if you want to pay for an ID card, if you want to pay for other fees that are required by the government at different levels, if you wanted to register your own company, if you wanted to do everything – you don’t have to go to offices. So we wanted to make it easier, from the central government level, but also at the local level.
That’s what motivated us to say IT is important: it will help people at all levels. That means in terms of financial inclusion, which is more than just formal banking (though that is critical, too). It includes moving the money around, purchasing things, transferring money, and also paying for different services that are needed. We see this as key for ordinary people, to be able to see how the money is leveraged within the banking system.
Inclusion Hub: What are your plans to produce even greater financial inclusion?
Claver Gatete: By June 2016, we are completing a project to digitize everything. We’re linking all of this in one co-operative bank, which this project will fully digitize. To support the bank, we’re also mobilizing resources so that they can hold almost four times the amount that they lend out.
Because the co-operative banks’ branches are close to the population, they understand the population’s needs. They are the ones that are really helping because they are enabling the basic needs of the country’s population.
This linking of technology and customer-centric service drives bank account adoption and usage, helping us grow ever closer to 100% financial inclusion.