FinScope Rwanda’s survey on access to finance that was released Thursday shows that local banks have a problem, a very sweet problem and to address it, they must take a bus out of Kigali to districts like Ngororero and Burera which have the lowest number of banked adult population.

The key finding was that 89 percent of the country’s adult population has access to financial services, through both formal and informal channels meaning that Rwanda has not only surpassed the 2017 target of 80 percent but also done it with a year to kill.

It also means that the 2020 target of achieving 90 percent, financial inclusion has technically been met with four years to kill. Congratulations. We can cheer to that and perhaps now target 100 percent; why not?

But the numbers also show gaps. They indicate that majority of Rwandans are still reliant on informal financial services; it means a huge growth potential for actors in the financial sector such as banks whose work was been clearly cut out in the report.

The report says that of the 4 million adults in Rwanda who have access to formal financial services, only 1.5 million adult Rwandans, (26percent) use banks; but only slightly over 60600 adults of the 1.5 million exclusively rely on banks; others have alternatives outside banking.

It is a remarkable reduction from the 5 percent who used to do so four years ago, according to Finscope’s 2012survey findings. Bank customers have dwindled.

In fact, since 2012, banks have only recruited 400, 000 customers across the country, slightly over 30, 000 customers for each of the over ten licensed players on the market.

And these clients are mostly located in urban areas, Nyarugenge, in Kigali city, to be precise. For instance, while 70 percent of the Nyarugenge district adult population uses banks, the number is 11 percent in the western province district of Ngororero.

The report has exposed banks to be doing a bad job at retaining customers and also not as good at attracting new ones beyond the city peripheries.

Apparently, 52 percent of the banked adult population now uses a combination of formal and informal financial services,up from just 27 percent in 2012.

When a man abandons his car, in spite of its comfort, to ride on a taxi motor to work, there’s a problem; banks must find the problem that is hurting their business model. They must invest in customer satisfaction surveys to know why they are losing customers to informal financial service channels.

I suppose that people know that having a savings bank account is not only safer but also earns them a substantial interest; so why do they prefer informal non-banking options?

It could be limited access to banking services across the country or the cumbrous costs of using banking services not to mention the deterring bureaucracy involvedin say, processing for a bank loan.How can banks attract new customers?

I say, drop those high sales targets and instead give your staff new customer satisfaction targets based on the hypothesis that profit or customer acquisition is largely a byproduct of good customer service. Treat me well I will stay; mistreat me and I will divorce.

What Finscope 2016 shows us is that most clients are divorcing from their relationship with banks; unfortunately, there is no evidence that they are being treated better where they go;actually with banks, customers are better off with the devil they know than the angel they don’t.

So banks need to employ the customer acquisition model that focuses on customer satisfaction rather than sales targets because although they are still the most reliable source of financial services they seem to have failed to ably articulate their value to customers.

The report also reveals that banking services are still largely an urban phenomenon; bankers need to take the bus from Kigali to places like Burera district where 87 percent of population gets financial services informally; nationally, that population is 72 percent.

It is understandable that Banks love Kigali because it is where close to 80 percent of the economic activity takes place but moving forward, the city is not the place for banks to galvanize growth especially for retail banking services. It is the countryside…

Fortunately, a few banks have started doing something about it. Through agency banking, mobile banking vans, they are now taking services to the remotest parts of the country.

It should not entirely be about business profit for banks, especially indigenous ones, they should also have a responsibility to the nation and promote trends that financially transform lives of Rwandans.

Most importantly for banks is how to incorporate the huge informal financial sector into the formal circle; I would favour a strategy that targets to recruit village saving schemes; get them to open group accounts and develop special products for members saving with the groups.

Districts like Karongi and Rutsiro which returned the highest number of financially excluded people in addition to those with high numbers in the informally served people such as Burera are the new growth frontiers for retail banking services. Certainly not Nyarugenge…

editorial@newtimes.co.rw