The number of Rwandans who have access to formal financial services and products increased by more than 38.8 per cent to 7.5 million between 2020 and 2024, a new report published by Access to Finance Rwanda (AFR) on June 20, found.

That implies that 92 per cent of Rwandans have access to formal financial services, which the report describes as services offered by institutions that are governed by a legal precedent of any kind.

Those services are offered by banks, mobile money operators, insurance and pension companies, microfinance institutions, Saving and Credit Cooperative Societies (SACCOs), as well as regulated non-deposit taking financial institutions.

The increase in access to formal financial services was driven mainly by mobile money, insurance, and pension.

The report showed that at least 70 per cent of Rwandans have access to other formal financial services – those services that are not offered by banks – up from 55 per cent in 2020.

Out of those formally included, 91 per cent use mobile money, 30 per cent use Saving and Credit Cooperative Societies (SACCOs), 25 per cent have access to pension, 23 per cent use insurance, and 6 per cent prefer microfinance institutions (MFIs).

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The number of Rwandans who have access to formal financial services increased across the spectrum except those who have access to SACCOs and MFIs, which remained sluggish.

Rwandans with access to mobile money services increased by 56.8 per cent to 6.9 million, while those with access to insurance and pension products grew by 100 per cent and 320 per cent to 2.2 million and 2.1 million, respectively.

The number of Rwandans who have access to SACCO and MFI services dropped significantly in the same period by 8 per cent to 2.3 million and 4.6 per cent to 636,000, respectively.

Out of those financially included, only 22 per cent have bank accounts. That means that only one in three adults or 2.5 million, representing 31 per cent of the total population in Rwanda, are using banking channels or services, the report found.

People living in urban areas are more likely to be banked. The report found that 39 per cent of the banked population was in urban areas compared to 14 per cent in rural areas.

However, more people in rural areas are more likely to use other formal financial services. The report indicated that 76 per cent of the Rwandan population who have access to other formal (non-bank) services live in rural areas compared to 56 per cent in urban areas.

Patience Mutesi, Managing Director at BPR Bank Rwanda, attributed the negative trends in limited banking access to the expensive nature of deploying banking services to remote areas.

"Our model is quite expensive for us to go deeper into the villages. As borrowers and customers go towards non-bank formal structures, it becomes more expensive for us to maintain branches in areas where there are no transaction volumes,” she observed.

"You are faced with a decision on whether to maintain that branch network or to replace it with a more cost-effective model, in our case, agency banking,” Mutesi added.

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Access to credit, key challenge.

While the uptake of formal credit has slightly improved from 22 per cent, or 1.5 million in 2020 to 24 per cent (1.9 million) in 2024, the number of those who did not borrow money in the past 12 months increased by 13 per cent to 37 per cent in 2024.

The report attributed the decline in access to credit, not to higher interest rates, but to the fact that people don’t feel there is a need for them to own bank accounts, they are afraid that they might borrow and fail to repay, and others lack security or guarantee to acquire credit.

"We need to design and develop products that speak to the specific needs of the people that we are serving,” Mutesi weighed in, adding that forging partnerships with financial technology companies could reverse the trend.

Broadly, Rwandans who have access to any form of financial products or services grew by 3 percentage points to 96 per cent, or 7.9 million in the same period under review.

In particular, the use of digital financial services increased from 30 per cent, or 2.1 million in 2020 to 73 per cent, or 5.9 million in 2024.

The latest survey paints an encouraging picture of digitisation showing greater interoperability and innovation that have led individuals and businesses to use electronic financial services.

However, Ivan Murenzi, the Director General of the National Institute of Statistics of Rwanda (NISR), stressed that there is a need to move beyond access to ensure that people have affordable financial services.

"Access to financial services is a foundation, and we can only speak about moving beyond when the foundation is laid,” he said, adding that to move beyond access means, however, means that you want those who have, say a bank account, to use them conveniently and affordably.

"You want every Rwandan to move money easily,” he argued.

Murenzi sees the automation of SACCOs being a key driver in elevating access to credit for those who were previously unable to access it particularly those in remote areas, but he insisted that interoperability could make a more difference.

"We need to get to that point where all players are interconnected. You will then start seeing scale happening and costs coming down,” he observed.

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Gender lens

The gender gap in accessing formal financial services in Rwanda has decreased from 8 per cent in 2020 to 4 per cent in 2024.

Despite more males being banked than their female counterparts (a gender gap of 10 per cent in 2024), more females now have access to former financial services (90 per cent in 2024 compared to 73 per cent in 2020).

According to Soraya Hakuziyaremye, Deputy Governor at the National Bank of Rwanda, the Government embarked on the journey of closing the gender gap in financial inclusion in 2020.

The journey, she said, was informed by the availability of real time gender disaggregated data. "This gives us a picture where we are in making sure that we don’t have an increasing gender gap.”

Hakuziyaremye said the Government designed gender inclusive finance policy initiatives, which were targeted to help financial institutions to design products that have a gender lens.

"Last year, we first issued the guidelines for developing gender inclusive finance products for our financial institutions. Another initiative is a policy initiative to strengthen mobile money access for women in rural areas,” she noted.

Overall, access to informal financial services slightly decreased from 78 per cent to 72 per cent in the year under review, which implies that 5.6 million people use services which are not regulated and operate without legal governance.

"We would like to see further decrease because the decrease in informal access will signal that people are now moving to access formal financial services,” John Rwirahira, Head of Research and Information at Access to Finance Rwanda, said.

Financial exclusion – those with no access to any form of financial services or products – decreased from 7 per cent to 4 per cent, or 316,000 people.