Rwanda’s financial sector remains stable with record-high assets valued at Rwf10.6 trillion in 2023, representing a 20 per cent increase from Rwf8.1 trillion registered in 2022.

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This was highlighted in the presentation of the Monetary Policy and Financial Stability Statement delivered by John Rwangombwa, Governor of the National Bank of Rwanda, on Thursday, March 21.

Currently, the country has 664 financial institutions licensed by the central bank, ranging from banks, insurance, pension, fintechs, microfinance, and non-deposit-taking institutions, among others.

Rwangombwa noted that the growth of the financial sector shows the impact it has in financing the economy, holding a 66.7 per cent share of the GDP in 2023 from 64.9 per cent in 2022, however, credit to private sector has remained stagnant over the last five years rounding at 31 per cent.

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"The financial sector demonstrated resilience and maintained its growth trajectory, despite the challenges caused by global and domestic macroeconomic challenges, volatile weather patterns, and the strengthening of the US dollar,” reads part of the statement.

The growth of assets was observed across all sub-sectors, including the banking industry whose total assets grew to Rwf7.3 billion, as the first-largest sector, was driven by an increase of deposits and capital, it stated.

Assets of the pension sector expanded to Rwf1.5 trillion on account of the growth of contributions and investment income, the insurance sector’s assets also increased to Rwf963 billion owing to improved underwriting returns, capital injection, and investment income, while assets of microfinance institutions grew to Rwf633 billion due to increased deposits and equity capital.

In terms of size, the financial landscape was characterised by some entries of industry players and mergers across sub-sectors in 2023.

For instance, the regulator witnessed the entry of a new mutual insurance company, three money transfer and remittance companies, six payment aggregation service providers, and two e-money issuers.

Additionally, it licensed 12 new lending-only institutions and six Trust and Company Service Providers (TCSPs), two new private pension schemes.

The year was also marked with the acquisition of Cogebanque by Equity Bank Rwanda, and Heifer private pension was acquired by Sonarwa Life pension scheme. In contrast, Sanlam Vie private pension scheme was suspended.

Sustainable finance

The central bank assessed the readiness of Rwanda’s financial sector to deal with emerging issues such as climate change, emphasising the need to mitigate and manage climate-related and environmental financial risks.

"We see continued stability in the medium term and we don’t expect any challenges that could disrupt the stability of the financial sector, but we remain vigilant as the regulator to continue monitoring and reviewing these emerging issues,” Rwangombwa said.