Innocent Bagamba Muhizi speaking at the summit this weekend
The long awaited digitization of Rwanda’s Sector Savings and Credit Cooperatives (umurenge saccos) is expected to be completed as soon as possible following a delayed implementation process for at least 15 years.
The CEO Rwanda Information Society Authority (RISA), Innocent Bagamba Muhizi says that the final process to fully digitize all 416 saccos in the country is almost ready.
“We are now running the very last stretch of the journey to complete automation of the 416 Umurenge Saccos. We have a few of them remaining and it has been a very difficult but interesting journey and we believe we are going to see some good products at the end,” Muhizi said.
Muhizi was speaking at the just concluded second Microfinance Tech Summit held in Kigali organized by the Association of Microfinance Institutions in Rwanda (AMIR).
According to the Ministry of Finance and RISA, the Saccos digitization process, which was delayed by failure to digitally consolidate the services, has reached 94%.
With the low digital literacy (below 30%), Muhizi said that Rwanda is banking on the role of digital ambassadors to educate the end user to know how to consume these services.
Currently there are about 1500 digital ambassadors who have been trained to increase digital literacy especially financial literacy among citizens in order for Rwandans to consume digital services provided by microfinance.
This is part of the sector’s drive to bring digital financial services closer to citizens as part of the financial inclusion strategy which is purely banked on availability of phones to all.
As of 2023 digital financial services countrywide were 58% and are expected to reach about 80% by the end of this year.
However, the need for tools such as smart phones to access these service remains a concern, despite the establishment of the ConnectRwanda campaigns aimed at availing affordable phones to all Rwandans.
The campaign has seen over 44,000 smartphones pledged and 24,973 honoured but also telecom companies such as the Airtel bringing affordable 4G smartphones.
Though the mobile phone penetration rate in Rwanda stands at 87.4% (according to the fifth Rwanda population and housing census – 2022 (RPHC 2022), Muhizi said that smart phone penetration remains low thus a new World Bank project underway to address this gap.
“We are having a World Bank project to look at how we can really bring mobile smart devices at a really affordable price because this market, I must say is a very price sensitive,” Muhizi revealed.
Muhizi explained that the project will look at either de-risking the phone manufactures or support the existing financial to avail smart phones to citizens at an affordable price through micro loans.
Second Microfinance Tech Summit held in Kigali organized by the Association of Microfinance Institutions in Rwanda (AMIR).
RISA CEO also advised commercial and fintech companies on the need to collaborate in providing financial solutions to Rwandans instead of competing against each other.
For example, in Rwanda, Fintechs want to do work of banks (financial services) and banks also want to venture into work of fintechs and payment platforms such as mobile money payments and Points of Payments (PoS) are restricted instead of being combined or being interoperable.
AMIR Executive Director, Jackson Kwikiriza said that there is a need for initiatives which will enable the association to advocate for more financial inclusion but also increase access to finance.
“We want to see a solution to solve the problem of Rwandans who travel long distances to seek financial services such as loans etc.
He added that Fintech and Banks need to develop USSD based technology to enable Rwandans apply for a loan from the financial institution without moving a step.
“The first thing we want is for all Rwandans to have access to money, everyone saves what they have, regardless of how much they have, without leaving where they are,” Kwikiriza said.
“We want every Rwandan to know how to work with financial institutions and this cannot be done without having technology accessible, user friendly to all and everywhere,”
R-Switch – a platform that connects banks, financial institutions, and mobile payment systems in Rwanda, says there is more work needed to achieve digitalization of financial services and this means riding on the available interoperability infrastructure- the Rwanda national digital payment system (RNDPS)- eKash.
Jean Jacques Kajuga, the R-Switch Chief Operations Officer
Jean Jacques Kajuga, the R-Switch Chief Operations Officer said that since 2018 they have introduced the national e-cash interoperability which makes mobile payments easier and enable microfinances to provide digital services to Rwanda consumers, however it is currently being used by commercial banks.
Kajuga said that if microfinances come on=board, the RNDPS will enable end-to-end interoperability of bulk and low-value payments in Rwanda, promoting a cashless and inclusive economy by, for example Facilitating shared payment infrastructure, reducing costs, and fostering competition and innovation, increasing digital liquidity, keeping money within the system and allowing customers to transact from their preferred providers and channels.
“We want to make your work easy. With a centralized infrastructure, you come and connect. While we are talking at a later stage, you will see how many banks, telcos are connected, with a single implementation you are connected to the entire financial ecosystem,” Kajuga to MFIs
For instance, on the RNDPS peer-to-peer (P2P) Transaction Status shows that over Rwf3billion has been rolled through the system in which Airtel has 82% (5.5million users) allowing customers to transact from their preferred providers and channels.
