Financial institutions urged to embrace digital services

Financial institutions have been urged to go digital to boost access to credit among small and medium enterprises.

Experts say that embracing financial digital platforms will achieve financial inclusion targets.

According to Pascal Nyagahene, the Chief Executive Officer of MobiCash Rwanda, digitizing the financial industry will not only strengthen Rwanda’s credit system but equally increase access to credit.

“Increasing access to formal financial services means being able to mobilise domestic savings which is critical for economic growth,” Nyagahene, told The New Times.

He added that emphasising the benefits of digital wallets through sensitisation campaigns is critical for the financial sector.

He was reacting to the recently launched FinScope survey 2016 which indicated more than 89 per cent financial inclusion in Rwanda.

And according Nyagahene, financial inclusion will only happen if people participate in the banking eco-system.

“We are working out arrangements with financial service providers so that the MobiCash platform is accessible from a bank account and mobile money operators. This will extend the banking system horizontally across all sectors which will improve financial inclusion,” he said.

For example, the survey revealed an increase in informal financial services of almost 72 percent up from 52 per cent in 2012.

Those accessing financial services through non-banking institutions have increased to 42 per cent up from 19 per cent in 2012.

This according to the experts is a testimony that the sector is not yet digitized to the required level.

Enhancing financial inclusion for all and reducing the number of people who are financially underserved will require going digital to ensure more efficiency and competitiveness.

Alex Kanyankole, the Chief Executive officer Development Bank of Rwanda (BRD), believes more should be done to increase connectivity especially in rural Rwanda.

This will not only speed up financial inclusion but equally revolutionize the entire financial sector.

John Rwangombwa, the governor National Bank of Rwanda (BNR) noted that more should be done to integrate those still in informal to the formal to boost access to credit.

“Digital financial platforms especially those accessible on mobile phones, can be used as a tool towards bringing more Rwandans to formal financial services,” Governor Rwangobwa said.

Rwanda has for instance registered a significant increase in banking Automated Teller Machines’ (ATMs) network, electronic cards; both debit and credit and mobile money accounts over the past few years.