Pro-poor savings model triggers banks to tap rural clients

A savings model that seeks to empower the poor in rural areas is now helping banks to reach previously un-banked segments of the society. Some of the licensed Commercial Banks currently operating in the local banking sector are optimistic that the model dubbed sustainable access to finance and investment will help bolster the bank’s current initiatives that seeks to reach the rural un-banked population. Statistics by Central Bank indicates that the un-banked population stands at 80 per cent of the total population. Francis Ndayiziga, the Branch Banking Division Leader at Urwego Opportunity Bank (UOB) believes that increase in rural savings will help boost penetration of banking services thereby reducing banks operating costs. “This savings model helps the rural poor to pool their resources as it enables them to be better organised than was the case before. That makes it easier to bank them”, he told Business Times in an exclusive interview yesterday. Despite the rising costs associated with efforts geared towards increasing penetration of banking in rural areas, bankers are optimistic that the model is a good initiative that seeks to foster financial inclusion in rural areas. “I believe it’s a good initiative and an opportunity for us to support development”, Gloria Nyambok head of Business at KCB Rwanda said, adding that for a total financial inclusion to be a reality, infrastructure needs to be improved to ease banks penetration to rural areas. She further revealed that there is need to change people’s attitude towards banking through intensive financial literacy in order to boost the savings culture. The new model has seen a total of over Rwf 500 million worth of savings countrywide, according to officials of Care International an international NGO. Sibomana Emmanuel a beneficiary of the project in Kirehe district said that the initiative makes it easier for the beneficiaries to bank their accumulated savings. “It has been unbelievable that someone with an initial amount of as little as Rwf 50 can have his savings grow to enable him buy various forms of expensive goods such as animals or iron sheets for constructing modern houses”, Kiribazajire Colette, the officer in change of social affairs at Kigina sector, Kirehe District noted. Kiribazajire added that with such initiatives in place, a vast majority of local officials are upbeat that access to finance for all would be achieved basing on the country’s aspirations for the future. Ends

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Pro-poor savings model triggers banks to tap rural clients