Kigali- A visitor to Rwanda notices the lack of use of cash in daily transactions, whether in stores, markets, means of transportation, paying bills, and even making payments to formal and informal institutions, all the way to performing surgical operations. Anyone in Rwanda can pay and receive money using a mobile phone, even its non-smart version, as telecom companies operating in the country provide this service. Activating the service only requires going once to the telecommunications company to obtain the secret code for the financial wallet.
Financial inclusion
These services fall within the framework of what the government calls the “financial inclusion policy” that it launched in 2018, and aims to reach the widest segment of the adult population within 4 years. Today, Thursday, the Ministry of Finance revealed the results of a study that contributed, in one of its aspects, to measuring the extent to which the goals it set related to integrating the population into the financial system were achieved.
The Ministry of Finance and Economic Planning released the results of a survey of the scope of finance in the country (FinScope 2024). The importance of the new study, according to the Ministry, lies in the fact that it is the first after the Covid-19 pandemic, and its launch also coincided with the completion of the stages of the “National Strategy for Financial Sector Development,” according to the Ministry of Finance.
The study showed that 96% of the adult population, or approximately 7.8 million people, are now able to access financial products and services that meet their needs, that is, they are active users of payment services and sending money using phone applications without using cash, or going through traditional banks, which is known as Financial inclusion, up from 93% in 2020.
Non-banking financial products
The report highlighted that 92% of the adult population relies on formal non-banking financial products and services, such as payment via electronic applications, compared to about 75% in 2020.
The report indicates that approximately 86% of the population used the mobile money sending service in the first half of this year, compared to about 30% in 2020. Despite this, the percentage of individuals who use traditional banks remained constant at 22% of the population between 2020 and 2020. 2020 and 2024.
Commenting on the results of the study, Minister of Finance and Economic Planning Yusuf Murangwa said that the results are “in line with the strategic plan for the development of the financial sector between 2018-2024.”
In turn, Rwandan Prime Minister Ngirinte Edward said that the government has succeeded in reducing the financial inclusion gap to about 2% this year, and stressed that the strategic plan for developing the financial sector is “the most prominent sustainable development goals, and an essential driver of economic growth that helps reduce inequality in income and reducing poverty rates.
The pandemic boosts mobile payments
During the Covid-19 pandemic, African governments encouraged their populations to use mobile payment systems to limit the spread of the virus, and by the end of 2023, the continent saw a boom in fintech companies with an increase of 17%. Bloomberg reported that the continent’s major telecommunications companies have increased their investment rates to enhance phone payment services and digital wallets.
According to a report issued by the GSMA, a lobby group that represents the interests of global mobile network operators, the value of financial transactions over the phone in Africa increased by about 12% to record approximately 919 billion dollars, and the volume of transactions increased by 28%, or about 62 billion dollars. Dollar in 2023.
According to the report, the adoption of mobile payment systems can lead to an increase in the gross domestic product. The report stated that the circulation of money via phones in sub-Saharan Africa reached about 3.7% of the gross domestic product, worth $150 billion, compared to approximately 5.9% in the east of the continent. That is, approximately $60 billion, and 4.1% in West Africa, at approximately $70 billion, by the end of 2022.
