Rwanda’s financial inclusion rises to 96% in 2024

Rwanda has made significant strides in financial inclusion in 2024, with 96% or 7.8 million Rwandan adults now being financially included, marking a notable increase from 93% in 2020. Despite this progress, the percentage of banked individuals has remained stagnant at 22% over the same period, and there has been a noteworthy decline in borrowing activities, with only 63% of adults taking loans in the past year, a decrease from 76% in 2020. CNBC Africa recently caught up with Jean Bosco Iyacu, the CEO for Access to Finance Rwanda, to delve deeper into these statistics and gain insights into the current financial landscape in the country. Iyacu highlighted the positive shift in financial inclusion, emphasizing that although the nation has seen a substantial increase from 93% to 96%, there is still a crucial 4% of the population that remains underserved by the financial sector. He pointed out that the demographics of this unserved segment mainly consist of young individuals aged between 16 to 17 and the elderly population, aged 61 and above. Iyacu stressed the importance of developing tailored financial solutions to cater to the specific needs of these groups to ensure they are not excluded from the financial system. One of the key advancements mentioned by Iyacu was the growth in formal financial inclusion, with the percentage of Rwandans utilizing regulated financial institutions rising from 77% to 92%, surpassing the targeted 90% set for 2024. This spike was largely driven by the increased adoption of mobile money, insurance, and pension schemes within the country post-COVID. The CEO highlighted the role of mobile money in providing convenient access to financial services beyond mere transfers and payments, emphasizing the need to expand offerings such as savings, credit, insurance, and investments through digital channels to meet consumer preferences for mobile-centric solutions. However, Iyacu also acknowledged areas of concern within the financial ecosystem, particularly in savings and credit uptake. He noted a mere 2% rise in credit utilization from 2020 to 2024, signaling a need for heightened efforts to promote borrowing activities. In response to these challenges, he outlined strategies aimed at enhancing savings options and encouraging broader collaboration among financial service providers to offer innovative savings products. To drive further growth in financial inclusion, Iyacu proposed fostering partnerships between traditional financial institutions, fintech companies, and capital markets to introduce novel savings schemes and investment instruments tailored to diverse consumer needs. He emphasized the importance of empowering fintech firms to innovate and cater to low-income individuals who have historically been underserved by traditional financial entities. Overall, Rwanda's progress in financial inclusion is commendable, with the country achieving a high level of inclusion in 2024. However, concerted efforts are required to address the remaining gaps in bank usage and credit access, as well as to expand and diversify savings options to cater to the evolving needs of the population. By embracing innovation, collaboration, and tailored solutions, Rwanda can further bolster its financial inclusion efforts and ensure that all segments of society have equal access to financial services.