The year 2025 marked a turning point for Rwanda’s small and medium enterprise (SME) sector, as financial inclusion moved to the forefront of national discourse. The spotlight fell on women and youth-owned businesses, as discussions highlighted how expanding access to credit could transform not only individual enterprises but the broader ecosystem narrowing unemployment gaps and driving sustainable growth.

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Rwanda is often celebrated as a continental leader in financial inclusion, with 92% of adults holding a bank account or mobile wallet. Yet beneath this success lies a troubling disparity: only 8% of women have access to formal credit compared to 13% of men.

This gender gap underscores the urgent need for targeted interventions.

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In 2025, Rwanda launched WE Finance Code, a global initiative by the Financial Alliance for Women. The programme urges banks, governments, and institutions to dismantle barriers preventing women entrepreneurs from accessing credit. Financial institutions pledged to allocate at least 30% of their loan portfolios to women-owned businesses - a bold commitment that will require collective action from SMEs, advisory services, and development partners.

As Inez Murray, the CEO of the Financial Alliance for Women, noted: "When you bank a woman entrepreneur, you’re not just banking her business. You’re banking her children’s education, her family’s healthcare, and the roof over their heads.”

Persistent barriers

Despite progress, structural barriers continue to limit women and youth entrepreneurs. These include lack of collateral, limited financial literacy, poor bookkeeping, and entrenched social norms that restrict access to education, land, and finance.

While banks are generally comfortable supporting short-term working capital needs once cash flows are visible, they continue to face challenges in providing investment finance to startups. These challenges are largely driven by the absence of a proven track record, limited financial history, and higher uncertainty around future performance.

The government’s Women and Girls Access to Finance Strategy (2025–2030) seeks to address these challenges. It emphasizes financial awareness, savings culture, and understanding the true cost of credit.

Consultant Edwina Adhiambo Owaga stressed the importance of informed borrowing: "There is a need to deeply understand the cost of funds they are borrowing, measured against business revenue, if they are to make an informed decision.”

Women and youth: Different challenges, shared struggles

The Development Bank of Rwanda (BRD) says their priorities will strategically be aligned with NST2 with a particular focus on expanding access to affordable credit for women and youth-led enterprises, promoting innovative financing mechanisms, and strengthening capacity building and technical assistance programmes through its advisory services.

Jean Claude Iliboneye, the bank’s director of business development, says that beyond giving loans, it will prioritize offering training in business management, financial literacy, and market access. This is crucial because many women and youth entrepreneurs lack the necessary skills to effectively manage and grow their businesses, even with access to finance.

"This holistic approach ensures that beneficiaries are not only funded but also equipped with the tools for sustainable success”.

Women entrepreneurs are often labelled "risky borrowers” due to societal expectations, yet evidence shows they are disciplined and resourceful. Many juggle multiple ventures from shops to crafts to food businesses, demonstrating resilience and creativity.

Youth entrepreneurs, meanwhile, face challenges of consistency and focus.

Balancing lifestyle, opportunities, and long-term vision often proves difficult. As Owaga observed: "There’s a very linear line between personal character and business. The business reflects the character of the owner.”

‘We need to talk to each other’

Stakeholders agree that fragmented efforts undermine progress. Vivian Kaitesi, from a value creation company, emphasized: "We need to talk to each other. It’s important that the entire ecosystem speak to each other for collective action.”

Business advisory firms like ES Partners Rwanda already play a critical role, working with entrepreneurs for four to seven months to prepare them for investment readiness. Such partnerships help banks assess whether SMEs are truly loan ready.

The startup dilemma

The government, through BRD, is re-thinking blended finance models and guarantee schemes to de-risk lending to women and youth with a rationale to attract more private sector investment into these segments by mitigating perceived risks and demonstrating the viability of these markets.

"As financiers, we must therefore rethink how we support early-stage ventures and explore ways to expand the availability of patient capital solutions within our ecosystems.”

Commercial banks remain cautious about financing startups. Christian Abijuru, the Head of Business Banking at I&M Bank Plc, explained: "It is said that traditional debt is rarely the most appropriate first option for startups, because at the early stages, startups are still testing their assumptions, validating their products, and searching for a scalable business model. In such circumstances, patient capital such as angel capital plays a critical role.”

Abijuru suggested that to bridge this gap, it requires collaboration between investors, development partners, and financial institutions to design blended and risk sharing structures that can absorb early-stage risk.

The missing recipe

Access to finance is vital, but it is not empowerment. The missing recipe lies in information, coordination, and ecosystem synergy.

Women and youth entrepreneurs need not only credit but also mentorship, financial literacy, and supportive policies. Banks, advisory services, and development partners must work hand-in-hand to ensure that financial inclusion translates into real empowerment.

Only then will Rwanda’s celebrated financial inclusion statistics reflect true equity and unlock the transformative potential of women and youth-owned businesses.

By having a well coordinated eco-system, commercial banks can better support startups during their most vulnerable phase and enable them to mature into bankable, growth-oriented businesses.