Financial service providers that do not take public deposits will need significantly stronger financial buffers under new regulations that raise the minimum capital requirement fivefold for top-tier institutions, while easing entry requirements for smaller specialised providers.

The 2026 regulation governing non-deposit-taking financial service providers (NDFSPs) raises the minimum paid-up capital for Category I providers from Rwf100 million to Rwf500 million and for Category II providers from Rwf50 million to Rwf200 million.

Category III providers, who were previously required to have at least Rwf30 million, will no longer face a minimum capital requirement.

The changes are contained in the regulation published in the Official Gazette on July 17, 2026.

The National Bank of Rwanda (BNR), which regulates the sector, said the reforms are intended to strengthen financial resilience, consumer confidence and providers’ capacity to operate according to the risks and scale of their activities.

"Overall, the changes are aimed at enhancing sector stability, consumer confidence, and sustainable growth of the industry and improving operational capacity of providers in proportion to the risks and scale of their activities,” BNR’s Communication and Engagement Department told The New Times.

Three-year window to raise capital or consolidate

Existing providers have three years to comply with the new capital requirements. BNR said most Category I institutions already operating in the country exceed the Rwf500 million threshold.

"The National Bank of Rwanda is confident that three years will be enough for institutions to meet new capital requirements of Rwf500 million and Rwf200 million,” the regulator said.

Providers that fall short can submit capital build-up plans showing shareholders’ commitment to inject additional capital. Smaller institutions that cannot raise sufficient capital on their own may also merge.

"Alternatively, small institutions will be given the opportunity to merge and form one strong company in case raising capital individually is not possible,” BNR said.

Felix Nkundimana, Chief Executive Officer of Jali Finance and chairperson of the Association of Credit Service Providers Rwanda, welcomed the higher thresholds, saying previous requirements were too low for lending institutions.

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He said stronger capital bases would give lenders greater capacity to finance businesses while maintaining prudent risk management.

"It&039;s going to be a positive case. The capital requirement was very minimum. Imagine having a financial institution that is into lending business with a minimum capital of Rwf30 million,” Nkundimana told The New Times.

He said Rwf30 million gave a lender little room to finance small businesses while maintaining proper risk diversification.

For instance, under a recommended 10 per cent exposure limit per client, a lender with Rwf30 million in equity could lend no more than Rwf3 million to one borrower, he said.

Nkundimana said the low capital threshold had helped bring more players into the sector, but the market was now mature enough for new entrants to commit more capital and build sustainable financial institutions.

Aloys Manzi, chairman of Manzi Finance Ltd, said stronger capitalisation should make the sector more resilient.

"Higher capital means greater capacity to absorb losses, more resilient institutions, and stronger protection for consumers and the wider financial system,” he said.

Why Category III has lighter rules

The new Category III mainly covers specialised services that were previously placed in a special category, including debt collection, credit intermediation and debt counselling.

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"For new category III, what was done was upgrading services that were previously in the special category (debt collection, credit intermediary and debt counselors ...),” BNR said.

Services that were previously classified under Category III have, meanwhile, been moved to Category II.

Nkundimana said the exemption from minimum capital requirements was appropriate because Category III providers mainly offer specialised services rather than significant lending.

"I would say that it’s fair enough; those companies [Category III providers] are mainly service providers to the rest of the ecosystem,” he said.

He added that raising the entry barrier for such businesses could discourage services that are needed in the economy.

For Manzi, the tiered framework strikes a balance by imposing stricter requirements on larger institutions with greater market presence and risk exposure, while allowing smaller, lower-risk providers to operate and grow without the same capital obligations.

"Exempting Category III keeps the door open for early-stage innovators, fintech entrants and grassroots financial inclusion — precisely where new ideas are tested,” he said.

"Proportionate regulation of this kind protects stability without stifling innovation.”

Reclassification and stronger oversight

Institutions whose services have been moved to higher categories must realign their licences within 12 months.

"All currently licensed institutions under category III (per old regulation) are required to upgrade to category II (new regulation),” BNR said.

However, they can upgrade to Category I if they meet the new capital requirements and are willing to provide all services permitted under that category.

The new regulation also strengthens requirements covering governance, capital adequacy, consumer protection, reporting and market conduct, while introducing revised licensing and supervision fees.

Supervision fees also change

The regulation retains the 0.05 per cent supervision fee for Category I and Category II providers, calculated on audited gross income generated in the previous financial year.

However, the minimum fee for Category I providers has doubled from Rwf500,000 under the 2023 regulation to Rwf1 million. The minimum for Category II remains Rwf500,000.

Category III providers will pay a fixed supervision fee of Rwf100,000.

Category I and II providers must pay the fee by April 30 of the following financial year, while Category III providers must pay by January 31 each year.

BNR said the new framework introduces a more risk-based and proportionate regulatory regime for NDFSPs.

"It strengthens licensing, governance, capital adequacy, consumer protection, reporting, and market conduct requirements, while aligning regulatory obligations with the nature, scale, and risk profile of different categories of providers,” the central bank said.

The broader objective, BNR said, is to promote responsible innovation, financial inclusion and consumer confidence while maintaining financial stability.