Banks can do more for the financially excluded

Editor, RE: “Bank of Kigali in new drive to deepen financial inclusion” (The New Times, September 19). Interesting statistics by Rwanda Finscope Survey! As they say, numbers don’t lie. I wish to zoom on the 1.4 million Rwandans excluded in the formal financial sector. From the promotion above, to open a savings account one needs a minimum of Rwf100,000. This excludes monthly banking charges. Accessing the bank services means trekking to the nearest branch usually hours walk/cycling. I suspect a good percentage of the number above cannot possibly afford the minimum Rwf100,000, not to mention the hard to access bank facilities. Some banks have gone into agent banking (authorising small business to transact banking services on the banks behalf), but even in the rural areas, this is still a limitation only to rural urban areas. Herein comes the beauty of mobile money. At every little corner, you see an MTN, Tigo or Airtel agent/reseller simply because they meet the need of the (really) small consumer such as the housekeeper earning Rwf15,000 per month, the ‘aide maçon’ casual construction laborer earning Rwf5,000 per day. A telecom company has introduced a mobile savings scheme of as little as you can afford with no minimums. These micro lenders and micro savings products are those that will eventually satisfy the need of the financially excluded, especially in rural Rwanda. Unless the formal banks are willing to invest in such products, I doubt much impact will be done to bring the last million into financial exclusion in Rwanda.= MG

Opinions

Banks can do more for the financially excluded