Mobile money and electronic banking is seen as the next big thing for the banking sector and telecoms, perhaps this is the reason why a lot of attention is being paid to them. However, the future of Rwanda’s all-inclusive cash-less economy could be elsewhere, according to sector analysts.

Rwanda, like any other country in the region and in Africa generally, has been using numerous platforms to promote less use of cash and more use of electronic means to transact business.

Indeed, a lot of progress has been achieved as far as electronic-based payments are concerned, with the National Bank of Rwanda (BNR) last year indicating that the number of debit cards increased by 31 per cent, from 487,498 in December 2013 to 638,869 cards in 2014. The number of credit cards increased by 201 per cent from 845 to 2,540 cards in the same period, according to the central bank’s monetary policy and financial stability statement for 2014.  

The number of Automated Teller Machines (ATMs) increased by six per cent from 333 to 354 ATMs, while the number of Points of Sales (POS) devices rose by 22 per cent 946 to 1,152 POSs during the period.

As for mobile money customers, the number more than doubled during the period, from over 2.5 million in 2013 to over 6.48 million clients at the end of last year. Mobile and Internet banking users went up from 412,007 and 8,869, respectively in 2013 to 659,712 and 41,616 users last year, respectively.

However, sector experts believe there is still a big segment of the population that is still financially excluded and even those who are registered on the platforms do not use them regularly. This means low deposits for the banks for on lending to the private sector.

"Many Rwandans are unbanked and not creditworthy. So how we empower them to use the various platforms at their disposal is the essence of financial inclusion,” said Mawere Mutumwa, a financial analyst.

Mutumwa said having a mobile wallet, as is the case for mobile money, does not necessarily mean people will take advantage of the potential they provide and use them more often in business transactions.

He argues that since there is already infrastructure in place, companies should look at the possibility of having all their services under one cost-efficient electronic suite of transaction processing, switching and mobile payments. This, he added, will promote an all-inclusive financial eco-system that promotes less use of cash and more of e-payment options. Patrick Ngabonziza, the chairman of Mobicash Limited, a company that is trying to build such a model in Rwanda, says people need a system that could further ease their e-payments and transactions.

Ngabonziza said Mobicash provides consumers with options to use their electronic money rather than instantly converting it to cash as with the current electronic e-payments systems.

"We have designed our systems with the view that they should be cashless from the start, so customers don’t need to cash out,” he explained.

Ngabonziza said the firm, which was licensed by BNR last year, is currently undertaking various electronic payment solutions, like facilitating people to pay for health insurance (Mutuelle de Sante) to Rwanda Social Security Board (RSSB), payment of land fees, paying for goods in shops, stadium ticketing and public transport payment, apart from the traditional use of the electronic systems to send and receive money.

Currently, telecoms and banks also have similar or more services for their clients using transaction platforms like POSs and mobile phone applications, which Mobicash uses.

However, Ngabonziza argued that they are not competing with the other sector players, but to complement what they are already doing.

"We are connecting people to transact through the banks and telecoms,” he said.

The health insurance scheme, Mutuelle de Sante, has over 80 per cent of the 11.5 million Rwandan population as subscribers. This means that if all of them are paying for the insurance through Mobicash, other companies, including banks and telecoms could tap that pool of clients to expand their product and service reach.

Soji Emiola, the chief executive officer of Sonarwa, told Business Times that service providers like Mobicash could play a big role in helping the general insurer reduce costs, but be able to widen its reach and access to a larger market using the platform.