About a year ago, Joseph Hategekimana, a student at TTC Muhanga Secondary School, did not have even a penny to his name and was solely dependent on his parents for all his needs. Fortunes for the 20-year-old high school student, however, started to change for the better when he started saving a portion of his pocket money with the school’s savings club early last year. Hategekimana says his decision followed a savings sensitisation training he attended, where people were encouraged to save and invest to safeguard their future.

Since then, he has never looked back. "Now I am aware of benefits of sacrificing today’s pleasures for the long-term gain. Besides this will help me to accumulate money to start up a small business and pay my school fees.” TTC Muhanga opened the savings club in 2015 and works with a savings and credit cooperative organisation (SACCO) in the locality where the student’s money is deposited.

Hategekimana and close to 190 other students at the school are part of a savings programme promoted by the Association of Microfinance Institutions in Rwanda (AMIR) that seeks to encourage primary and secondary school students to save and invest to secure their future. This outreach programme supports government’s drive encouraging Rwandans to embrace the savings culture to grow the country’s savings.

Savers speak out

Sabine Uwineza, a student at TTC Muhanga, says saving is essential as the money could help students cater for emergencies like sickness, or buy scholastic materials in case their parents experience financial problems. She adds that when students save and invest, they would be able to afford things like transport, airtime and simple requirements after completing secondary school instead of having to depend on their parents. "I know from the small savings I have accumulated, I can cater for some of the needs at home,” Uwineza states.

"I invested in two goats which I bought using Rwf8,000 loan I got from the school’s saving club which I was to pay back with an interest of 3 per cent; I managed to add Rwf4,000 to make Rwf12,000 for the goats,” says Anastase Twizeyimana, a student of TTC Muhanga.

Twizeyimana says when his savings increase, he will buy more goats so as to realise the dream of having a big goat farm for income-generation to support his parents.

John Habumugisha, a Senior Six student at the school, says he has decided to save almost all his pocket money of Rwf2,000. He says he saves Rwf1,500 each term. Habumugisha, however, says there are times when the financial situation at home doesn’t allow, which affects his savings targets.

Hope Joy Imanishimwe plans to set up an airtime vending business using her savings. She urges young people, especially students, to start saving "because every coin counts and one doesn’t need huge sums of money to embrace the savings culture.”

TTC Muhanga savings club projects

The savings club also carries out income-generating activities like vegetable growing and runs a barber shop (salon) at school from which they earn money to boost their savings. The salon earns good money since students cut off hair every month. The barber shop charges Rwf100 for a haircut and the money collected each day is deposited on the club’s savings account.

The club has over Rwf860,000 saving on the account so far.

Jeanne d’Arc Mukabatesi, the principal of the school, says the school agreed to support the savers business ideas because the service (salon) was lacking at the boarding school. "The idea of setting up a salon impressed the administration because we didn’t have the service at school. So we agreed to give a small room from they could set up the project. They used their savings to buy the required equipment and other salon requirements,” she explains.

Mukabatesi says, initially, it was not easy to convince students to start saving because they thought they just wanted to keep their money. Faced with this hurdle, the administration employed the services of a young saver in the area who impressed on them the importance of saving. "The gamble worked and members are happy… Because of the sacrifices they make to save they are able to access money in case they get problems that require money to solve,” she adds.

Advice

Hategekimana advises his fellow youth to embrace a savings culture since they cannot predict the future. "In case of any eventuality, the savings cushion you as fallback tool, especially if there’s no one willing to support you or pay your school fees.” With savings, one can be able to invest in an income-generating project and also cater for their basic needs, he adds.

Germain Maniragaba, a teacher and the school saving club’s advisor, says they encourage students to start saving when they are still young so that after school they can be able to invest in income-generating activities. That’s how they can secure their financial future and that of their families, as well as contribute to the wellbeing of their communities. Besides, it is easy for young savers to convince their age mates to embrace the practice and hence create communities of young savers and investors.

AMIR’s savings drive

Uwizeye at Association of Microfinance Institutions in Rwanda says the saving programme started in 2010 with 10 schools, adding that there are currently 64,000 student savers in 200 primary and secondary schools countrywide.

"By 2013, the clubs in primary schools had accumulated Rwf45 million worth of savings,” Uwizeye explains. Some schools save per week through clubs but each student has an individual account because individual accounts are easy to monitor. Schools have weekly discussions about money, savings, and investment among others. AMIR checks student accounts after every three months to monitor performance and know where and how to intervene in case some savings clubs are not doing well.

Young savers guide

Uwizeye says there are some core elements students and young savers need to understand to be successful with their savings goals.

The first one is psychological, where young children of five years start thinking of who they are, where they come from, how their parents get money to pay school fees, or whether their parents save for investments, and if they can predict their future economic growth. Therefore, it is important to teach children how to save at a young age so that they understand its benefits and embrace the practice to secure their future.

Parents need to assist their children to start up small income-generating ventures because such projects help them learn about money and investment, as well as become financially independent. This way, young people become self-reliant at an early age which eases pressure on their parents’ finances, enabling families to save and invest.

Young savers also need to learn about issues like budgeting and planning to ensure guided expenditure of their pocket money (for students) and hence support their savings objectives. When young people learn how to save, invest and plan their expenditure; this prepares them for financially solid future and enhances their interaction with communities thanks to their social enterprises.

Uwizeye urges local leaders to always conduct awareness campaign to ensure the public understands key financial ideals. He also challenges parents to initiate their children into saving and support their goals and projects. He says long-term savings help people invest and also boost bank deposits to lend to the private sector to undertake development projects.