EDITORIAL: Savings culture: Lending institutions should borrow a leaf from AMIR

THOUSANDS of primary and secondary students have been able to mobile close to Rwf460 million in savings over the past five years. This achievement by student savings clubs in 120 primary and secondary schools, countrywide, was brought about thanks to the Association of Microfinance Institutions in Rwanda (AMIR)’s financial education programme, which promotes a savings culture among young people across the country. Under the initiative, 87,622 savings clubs have so far been created in schools, while 66,998 students have opened savings accounts between 2011 and 2016. The feat underlines how far the country could go if more Rwandans saved a small part of their earnings. Primary and secondary school students don’t access large sums of money, and can only save a few hundred francs. Most importantly, this initiative has helped inculcate a savings culture and financial discipline among children in the participating schools at an early age. It is a fact that for any economy to attain sustainable growth and improved standards of living, its population must have a strong savings culture. In addition, more savings mean that bank deposits will grow and subsequently ease access to affordable credit. This way, the country is able to achieve its development goals while reducing its dependence on expensive investment finance from international lenders. Besides, a strong savings culture promotes financial inclusion and reduces the problem of access to start-up capital by entrepreneurs. Therefore, the onus is on leaders at all levels to encourage Rwandans, especially the young people, to save. The youth form the biggest percentage of the Rwandan population and are the future of the country. Improved savings among this demographic group will greatly enhance bank deposits and help avoid reliance on global financial institutions for investment capital. The more people save, the greater access to finance, which, in turns, impacts the economy in various ways, including in job creation and development efforts.

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EDITORIAL: Savings culture: Lending institutions should borrow a leaf from AMIR