As Rwanda continues to post steady year-on-year growth in access to finance, many small business owners are increasingly turning to short-term digital loans, mostly accessed through mobile phone USSD codes for quick and reliable financial support. From banks to telecommunications companies, collateral-free short-term loans have emerged as a key financing option for individuals and small enterprises. Business owners interviewed by The New Times say the services offer timely access to funds, flexible repayment periods and a critical safety net during emergencies. ALSO READ: Mobile loan uptake soars as digital financing picks up pace Peter Clever Nsanzumuhire, a young entrepreneur who runs Bwiza Coffee Group, which produces wine from coffee, said quick-access loans have helped stabilise his operations. “It is a very quick loan. In times of business emergencies that need immediate solutions, these loans provide security because the money can be accessed easily,” he said. Nsanzumuhire noted that, unlike traditional bank loans which can take weeks and often require extensive documentation, transaction reviews, project assessments and multiple bank visits—short-term digital loans are processed almost instantly. “As youth who are engaged in business, it can sometimes be difficult to secure loans due to lack of collateral. With MoKash, it is entirely collateral-free and based on transaction history,” he explained. Nsanzumuhire uses MoKash, MTN Rwanda’s savings and loan service. His current loan limit is Rwf250,000. Under the scheme, users borrow based on account activity and pay a nine percent interest rate within one month, with higher charges applied to late repayments. According to the FinScope Survey 2024 by Access to Finance Rwanda, financial inclusion has expanded significantly in recent years. The findings show that use of digital financial services rose from 30 percent of adults (2.1 million people) in 2020 to 73 percent (5.9 million people) in 2024. ALSO READ: Majority of mobile loan borrowers are youth–credit bureau Mobile wallet usage also increased from 60 percent of adults in 2020 to 77 percent in 2024, largely driven by deeper mobile money integration. Despite the convenience, Nsanzumuhire cautioned that digital loans should complement, not replace, traditional banking relationships. “It is important to also work with banks because detailed financial records and partnerships with financial institutions are sometimes required for bigger opportunities,” he said. Alice, a multi-product trader at Kabuga parking complex, said she regularly relies on MoKash to manage her business operations. “The short-term loans are very helpful, especially when stock runs low,” she said. After years of active usage, her loan limit increased to Rwf108,000. However, she recounted that in August last year she borrowed the full amount and delayed repayment, resulting in her loan limit being reduced to zero and her being listed with the Credit Reference Bureau (CRB). “They are good loans, but you must pay on time. Delaying payment can bring serious consequences,” she said, adding that she cleared the debt three months later. Kanamugire (not his real name), who invests in buying and renting out motorbikes, also uses short-term mobile loans, particularly Bank of Kigali’s BKQuick. “Sometimes there is not enough money to complete an important business activity. Having easy access—without endless phone calls or lengthy bank processes—helps a lot,” he said. Recently, Kanamugire needed an additional Rwf200,000 to purchase a second motorbike after raising Rwf800,000. He used BKQuick to complete the transaction. The loan is repayable within three months at a six percent interest rate, with installment options available. Loan limits increase based on account transaction history. “It works well if borrowers maintain discipline. It is important to borrow only what is planned for, not simply because the money is easily accessible,” he advised. As digital financial services continue to expand across Rwanda, short-term loans are increasingly supporting small enterprises. Business owners, however, warn that while access has become easier, repayment discipline remains critical to sustaining the benefits.
