Linking mobile money platforms with commercial banks could boost deposits and improve opportunities for the private sector to access credit, experts have said.
Ebenezer Asante, the MTN Rwanda chief executive officer, said the move could also bring down interest rates, making it easier for investors to undertake long-term development projects.
Asante said a lot of money is being pushed using mobile money platforms, arguing that if this cash is channelled through the banking system it would improve the banks' liquidity levels.
"Huge sums of money are being channelled through mobile money platforms. So, the government should encourage commercial banks to partner with telecom firms to bring these deposits into the mainstream banking system.
"Such an arrangement could boost bank deposits and ease access to affordable credit to undertake long-term investment projects," Asante told The New Times on Monday.
According to statistics from the Rwanda Utilities Regulatory Authority there are over 1.7 million subscribers registered on mobile money platforms; Tigo Cash, MTN Mobile Money and airtel money. Over 62 per cent Rwandans have access to mobile phones.
Because most people do not save with formal financial institutions, banks have low liquidity which pushes up rates on commercial loans.
The government last year launched a sensitisation drive under the national financial education strategy to encourage Rwandans to save with banks.
Ephraim Turahirwa, the chief executive officer of Bank Populaire, said developing a financial culture, where the majority of Rwandans save with the formal banking sector, will help reduce liquidity challenges facing many commercial banks and bring down interests rates.
Turahirwa also encouraged financial institutions to mobilise funds from external sources to serve customers well.