Financial awareness among the rural poor will help boost financial inclusion for all, experts suggest.
Remy Iyikirenga, the Savings Coordinator and Promotion Specialist at the Ministry of Finance, says that much effort should focus in increasing financial literacy in rural areas to change the savings culture.
“We have achieved much in the recent financial literacy campaigns, now we want to see these stakeholders going deep in rural areas,” he told Business Times yesterday.
Iyikirenga believes that there is need to increase the savings culture in rural areas which will help to bring unbanked populations in to formal financial sector.
“We are providing a platform where all these stakeholders will be meeting to discuss their strategies and plans,” he said.
According to 2008 Fin Scope Survey, over 80 per cent of the rural based populatiom are financially excluded, hence need for more action to step up efforts to fight poverty.
The Executive Secretary Microfinance Institutions of Rwanda-AMIR, Rita Ngarambe, says financial education will help increase the customer base for microfinance institutions and savings and credit cooperatives (SACCOs) which are struggling to penetrate rural areas.
“Once people are trained on savings, it means that they will now need formal financial services,” she said. Earlier this year, the Association of Microfinance Institutions of Rwanda, the Ministry of finance and the Central Bank stepped up financial education campaigns that have seen most people banking with Saccos and MFIs.
“We have been training loan committees and loan officers of all microfinance institutions on credit management and recovery which has improved their capacity to manage credit which has also increased customer confidence,” Ngarambe said.
Moreover, experts are optimistic that with increased mobilisation and sensitisation, the microfinance sector is poised to continue growing thus playing a critical role in fighting poverty.
According Central Bank statistics, the sector’s total assets grew by 22 percent to Rwf 94.6 billion in June this year from Rwf 77.4 billion by end of December last year, an outlook that reveals positive results of financial education.
Ngarambe said that the positive improvement in the sector increased credit needed to finance projects especially in far-flung areas.
“The performance has been a result of our efforts to call on all defaulters to pay back loans which increases liquidity for the microfinance sector,” she added.
Jessica Massie, a microfinance sector specialist had earlier pointed out at an improvement in people’s attitude towards savings which, if enhanced would boost the number of those accessing banking services.