Kigali, Rwanda — The Rwanda Central Bank has said the country's formal financial inclusion (the number of people who can access financial services) has since doubled from 21% in 2008 to 42% in 2012.
An article last year had stated that Rwanda's formal financial access was as low as 21% but an official with the country's Central Bank dismissed the figure as old.
Jean Marie Vianney Hitimana, the acting manager of public relations and communications at the Central Bank says while it's true formal financial inclusion was placed at 21% four years ago in study report by FINISCOPE then, the same body in its 2012 report doubled the figure to 42%."According to Finscope, formal access to financial services doubled from 21% (2008) to 42% in 2012 and when the informal financial access is included, it brings financial inclusion to 72% and reduces exclusion from 52% in 2008 to only 28% in 2012," clarified Hitimana.
"The figure means," adds Hitimana, Rwanda is second to South Africa which has only 27% of exclusion."
FinScope is a nationally representative study of consumers' perceptions on financial services and issues, which creates insight to how consumers source their income and manage their financial lives.The study which was initiated in 2002 determines that realization of financial inclusion is only effective or functional if consumers have physical access to financial institutions, are eligible to open an account or use a product or service, can afford to open an account or use a product or service and can use those products and services in managing their financial lives.
That means that 42% of adult Rwandans can access, are eligible, can afford to use formal financial services mainly banks to manage their financial lives. It's arguably the highest in the region especially if the informal figure is added to make 72%.
The Government of Rwanda set a target of 80% formal inclusion by 2017.
The study says in 2008 52% of adults (individuals 18 years or older) were financially excluded which dropped to 28% (1.3million adults in 2012 28% with inclusion also rising to 72% about 3.2 million adults of Rwandan population who have or use financial products.
The reduction in exclusion was caused by a significant increase in the proportion of adults who are formally served through a formal financial institution. Rwanda has over ten commercial banks and several micro-finance institutions all providing a number of new innovative products that have been introduced to survive the competition and claim more of the market share of the 3.2 million Rwandans using their services.
Almost all major banks in Rwanda have now adopted the 'agency banking' model where agents are dispatched to remote areas to provide services such as accepting deposits, withdraws and many other s.
KCB Rwanda, a subsidiary of the Kenya Commercial Bank (KCB) Group was one of the first banks to introduce agency banking in Rwanda and helped the regional bank to amass its current customer base estimated to be close to 100, 000 at the end of 2012.According to KCB Rwanda's Managing Director Maurice Toroitich the bank has recruited 3296 agents countrywide with average monthly transactions of 40,000 deposits and 8,000 withdrawals.
But while general access to financial services has increased impressively, the study notes that the banked population remains at just 23% in 2012 from 14% in 2008. It however notes the important role played by the establishment of SACCOs that has significantly changed the landscape of formal access in Rwanda.
This intervention has been successful in providing formal financial services to 22% of adult Rwandans who would otherwise not use formal financial services.