Private sector critical to achieving financial inclusion, says WB chief

Rwanda and the World Bank recently signed a partnership deal as one of the efforts to support the country’s drive to ensure 80 per cent of the population access financial services by 2018. Bertrand Badre, World Bank’s managing director and chief operations officer, told The New Times’ Peterson Tumwebaze at the deal signing what Rwanda should do to achieve this goal. World Bank unveiled a $2.25m funding package to support Rwanda’s efforts to extend financial services to all citizens. Why are you interested in this project? It’s important to understand that financial inclusion is critical in developing economies like Rwanda. It is important to understand that development is not only based on social and physical infrastructure, education, transport and logistics, but also on a strong financial structure. Therefore, it is essential that people access finance to do business, save and reinvest. This eventually plays a huge role in poverty alleviation among the masses. We have entered into this partnership with the National Bank of Rwanda and the government to support efforts that will help in the realisation of these objectives. What is your assessment of the situation in Rwanda as far as financial inclusion is concerned? Rwanda has made huge progress over the last four years; we think this is a strong base to do even better. It is also great that Rwanda is the first country to benefit from this deal in the region. Remember, it’s not only about getting people opening bank accounts; it is about making them understand the benefits using formal banking institutions. It is also crucial for people to understand the sector, know their rights as consumers and pool savings for the future. The support to Rwanda is part of our global effort as the president of World Bank has expressed willingness to support initiatives that will ensure universal access to finance for every adult by 2020. We are targeting that every adult in the world should have a bank account by then. Presently, over 2.5 billion people have no bank accounts. With strong partners like Rwanda and support from other countries, we can achieve this target…Otherwise, whatever lessons we learn from here, we will use them to do better elsewhere. Fortunately, at the World Bank we are in position to import and export knowledge globally. What does it take to achieve financial inclusion, especially for the developing world? There is no way you can achieve financial inclusion without having the private sector playing the key role. Also, you have to set up targets and be aggressive in mobilising both public and the private sectors to succeed. Therefore, it’s about having an appropriate dose of strong government leadership and commitment from private sector as the major ingredients to realise this goal. Though developed economies took decades to achieve financial inclusion, the good news is that it will be faster this age because of technology. At the World Bank we encourage countries to promote universal access to finance. The most secure way to finance development initiatives is by mobilising domestic savings; this is where financial inclusion plays a key role. If people are able to save with banks then this money can be mobilised to finance long-term investment projects and develop the economies of the Third World. This is what has happened in developed economies, including Europe. What is your long term strategy for Rwanda? We will commit more money to Rwanda; I have greatly been encouraged by what I have witnessed so far.

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Private sector critical to achieving financial inclusion, says WB chief