Three East African countries – Kenya, Rwanda and Uganda – have topped the inaugural Financial and Digital Inclusion Project (FDIP) 2015 scorecard released by Brookings Institute, a Washington-based research and public policy organisation.

With an overall score of 89 per cent, Kenya topped the scorecard that evaluated access to and usage of affordable financial services by underserved people across 21 countries in the world, while Rwanda and Uganda tied in fourth place with an overall score of 75 per cent.

South Africa and Brazil were the other countries in the top five, occupying the second and third positions, with overall scores of 80 per cent and 78 per cent, respectively. Three countries –Chile, Turkey and Columbia – tied in fifth place with a score of 74 per cent each.

The scorecard assessed each country using 33 indicators across four dimensions of financial inclusion, including countries’ political commitment, mobile capacity, regulatory environment, and adoption of traditional and digital financial services.

According to Brookings communications director, Christine Jacobs, the 2015 report and scorecard are the first in a series of publications intended to provide policymakers, the private sector and non-governmental organisations with information that can help improve financial inclusion around the world.

Nine African countries were among the 21 countries sampled in the survey, with four of them including Tanzania, being members of the East African Community. Tanzania was given an overall score of 71 per cent and ranked in 12th on the scorecard.

How Rwanda performed

Rwanda scored 100 per cent on the aspect of the country’s commitment to deepening financial inclusion, something industry players like Edigold Monday, the managing director of Crane Bank, Rwanda, attributed to an enabling environment and policies put in place by the Government.

The study also gave Rwanda a very high score, of 94 per cent, in two other dimensions, of regulatory environment and mobile capacity.

Rwanda’s lowest score was on the ‘adoption’ aspect, where the country scored 49 per cent; this particular dimension measured how much Rwandans use debit and credit cards, online bill payment and purchase, among other indicators.

The low score on the ‘adoption’ aspect could mean that although Rwanda has put in place the infrastructure to enable services, such as online purchase, use of credit and debit cards and many others, few Rwandans are actually embracing their use.

According to the report, out of Rwanda’s adult population of 7 million people, 34 per cent of them are subscribed to unique mobile services (such as mobile money and internet banking) that help deepen financial access.

The report adds that financial accounts’ ownership among Rwanda’s adult population of 7 million people stands at 42 per cent among males and 35 per cent among women, meaning that only 23 per cent of the country’s adult population is financially excluded.

According to Monday, savings and credit co-operatives (SACCOs) have played a major role in deepening Rwanda’s financial inclusion, especially in the country’s remote areas, with recent studies indicating that Rwandans live within a radius of 5km of a SACCO.

"So, as commercial banks, this gives us an opportunity to partner closely with SACCOs to deepen inclusion, this on top of other interventions such as expanding our branch networks across the country,” she said.

As a region, Monday said, the ranking boosts East Africa’s outlook to potential investors because access to finance is an indicator that the economic fundamentals in these countries are working.

Firm commitment

All countries assessed in the scorecard are members of the Alliance for Financial Inclusion (AFI) that was founded in 2008 as the first global knowledge sharing network designed exclusively for financial inclusion policymakers from developing countries.

The countries are also signatories of the 2011 Maya Declaration, under which governments pledged to work towards unlocking the economic and social potential of the 2.5 billion unbanked people through financial inclusion.

Since 2011, Sub-Saharan African countries continue to lead the AFI network with 19 of the 54 institutions that signed up under the Maya Declaration, followed by Latin America and the Caribbean regions with 13 institutions.

In 2013, 30 members that ascribe to the Maya Declaration met at Sasana in Kuala Lumpur, and committed to, among others, reinforcing their institutional capacity and talent for formulation and implementation of effective financial inclusion policies that will deliver optimal impact.

The Brooking scorecard examined governments’ commitment as key drivers of enabling conditions for financial inclusion.

According to the findings, Rwanda, Tanzania, Uganda, India, Nigeria, Pakistan and Zambia received the highest scores for country commitment.

The Brooking scorecard lauds Rwanda’s financial inclusion strategy that seeks to increase access to formal financial services, from to 80 per cent by 2017 and 90 per cent by 2020.

Rwanda was also commended for its 2013 adoption of the second phase of the national financial sector development programme, which includes an action plan for financial inclusion and the establishment of a unit to monitor progress.

The Brookings report also recognises Rwanda for supporting development of diverse mobile money offerings, in particular, noting that the country was one of the first in Africa to support mobile money-based cross-border remittances.

According to National Bank of Rwanda, the Government aims at building a ‘cashless’ economy, where Rwandans increasingly adopt digital platforms, such as mobile and internet banking.

With a mobile phone penetration rate of over 60 per cent, mobile phone-based financial services such as mobile money are tipped to push Rwanda closer to achieving its targeted financial inclusion target.

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