Rwanda: How Achievable Is Rwanda's Ambition to Scale Up Digital Payments to 80%?

4 November 2021

There is need to increase digital literacy and rollout digital technologies among the population so as to increase digital payments to 80 percent within the next three years in Rwanda.

This was said by Alice Higiro the Project Director at the Ministry of ICT and Innovation.

Slightly above 30 per cent of the population is currently using digital payments or electronic payments according to available statistics.

Higiro was sharing Rwanda's vision in ICT at the opening of a three-day meeting on digital practices which brought together 11 African cities to foster the exchange of experiences among cities and identify good practices in digital technologies.

The cities include Kigali in Rwanda, Bamako in Mali, Kampala in Uganda, Matola in Mozambique, Lagos in Nigeria, Niamey in Niger, Sèmè-Podji in Benin,Kumasi in Ghana, Benguerir in Morocco, Bizerte in Tunisia and Nouakchott in Mauritania.

These are part of the African Smart Towns Network- a flagship programme financed by the French Development Agency (AFD).

The programme seeks to accelerate the cooperation among them by creating digital activities together and to build more sustainable and inclusive communities in transition to digital technology.

Higiro said that currently, internet penetration in Rwanda is at 62.3 percent as 4G network penetration is at 96.5 percent while mobile penetration is at 84 percent adding that 100 most demanded services are accessed online of which 50 percent are fully digitized and others semi-digitized.

"In terms of digital financial inclusion, the goal is to reach at least 80 percent digitization. That means promoting a cashless economy and also strengthening e-commerce ecosystem," she said.

Digital financial inclusion involves the deployment of the cost-saving digital means to reach currently financially excluded and underserved populations with a range of formal financial services suited to their needs that are responsibly delivered at a cost affordable to customers and sustainable for providers.

"At the bottom we are looking at the general population. We have to equip the population with the basic digital skills to enable them to consume digital services without depending on someone else," she said.

She said that mobile money and mobile banking are key in driving digital financial inclusion.

According to the Central Bank report for 2020/21, the number of mobile banking subscribers increased by 11 per cent from 1,882,168 in June 2020 to 2,080,549 in June 2021.

On the other hand, Internet banking subscribers increased by 21 per cent from 87,614 in June 2020 to 106,312 in June 2021.

The value of merchant payments increased from Rw64 billion in June 2020 to Rwf152 billion in June 2021 mainly supported by the waiver of transaction fees from March 2020.

The report shows that in terms of the overall performance, the value of retail e-payment to GDP increased by 17.3 percent to reach 95.5 percent during the period under review.

The usage was dominated by mobile payment (transfer and acquiring services) and internet banking services, which account for 64.1 percent and 26 percent of the GDP.

"This was attributed to increased adoption of digital payment services as Covid-19 pandemic containment measures," the report says.

According to Higiro the current status of digital financial inclusion has to drastically increase by 2024 as per National Strategy for Transformation (NST1).

Pudence Rubingisa, the Kigali city mayor, all digital technologies including those for financial inclusion have to be exchanged among the 11 African cities grouped in the network.

"We have to try to put technology in the transformation journey. We need digital technologies in all services we offer to citizens, in businesses, in land services, waste management, and so forth to increase economic growth. We need to exchange best practices and experience as cities in the network," he said.

By improving digital skills, he noted, targeting particularly the youth, will transform the cities to a better future.

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