Rwanda on Thursday joined the rest of the world to celebrate World Savings Day with a call to Rwandans to embrace the saving culture to help speed up national development. The day was first marked on October 31, 1924 during an international conference in Milan Italy, in 1989. As part of the World Savings Day celebrations, the Ministry of Finance and Economic Planning, in collaboration with stakeholders, has commenced a Savings Week awareness campaign under the theme “Save for a better future”. The campaign is aimed at sensitising Rwandans on the importance of saving and how to exercise money management decisions that best fit the circumstances of one’s life. Key activities planned over the week include media talk-shows where experts in the field of finance, insurance as well as capital markets will impart wisdom on the importance of saving, the available saving opportunities and platforms and how it can be done. Since 2009, the Government adopted savings mobilisation strategy with a target of increasing the level of savings in the country to a rate of 20 per cent of GDP by 2020. The Minister for Finance and Economic Planning, Uzziel Ndagijimana, pointed out that embracing the culture of savings is the only sure way Rwandans can safeguard their financial future, that of their families, and also contribute to sustainable economic growth the country needs. “There has been improvements in terms of savings, however, it is not enough. We need to save more. We need to understand that it is through increased savings that we can spur investments, have access to low credit interest rates, reduce poverty and enhance to our dignity as nation,” Ndagijimana said. According to the 2016 FinScope survey, about 86 per cent of adults in Rwanda (roughly 5.1 million individuals) save. The rise in number of savers is due to increase in formal savings which rose to 49 per cent from 26 per cent in 2012. However, the banking institutions showed a slight decline from 14 per cent in 2012 to 13 per cent 2016. The uptake in formal savings is driven by savings at Umurenge SACCOs (27 per cent) and mobile money savings at 17 per cent. To augment this progress, government adopted different initiatives aimed at promoting the saving culture. These include, the establishment of Ejo Heza, a long-term savings scheme that targets salaried and non-salaried workers; Umurenge SACCOs, Iterambere fund, integration of financial education into school curriculum, as well as several savings initiatives offered by commercial banks, Microfinance institutions and insurance companies, among others. The initiatives are expected to improve the savings culture in the country. According to statistics, total savings are still below 15 per cent of GDP compared to the target of 20 per cent of GDP by 2020. The latest Finscope survey also indicated that lack of sufficient financial institution contributes to a poor savings culture. Its latest report points out that 35 per cent of adults still save at home due to inconvenience associated with inaccessibility to formal financial institutions. “We need to pull informal savers into financial institutions and ensure that they do not save to pay for living expenses but move on to invest to create wealth,” Ndagijimana noted. The recently adopted National Strategy for Transformation and Vision 2050 seek to turn Rwanda into upper-middle-income economy by 2035 and high income country by 2050. For this to be achieved, it requires that saving ratio to GDP increases significantly. editor@newtimesrwanda.com
