Banks faulted for low rate of financial inclusion

Bank of Kigali Group chief executive Diane Karusisi (right) speaks on a panel during the 11th Alliance for Financial Inclusion Global Policy Forum 2019 in Kigali on September 12, 2019. Looking on is National Bank of Rwanda governor John Rwangombwa. / Emmanuel Kwizera

Banks have been blamed for discriminating against vulnerable members of society, especially the youth and women.

Central bank statistics show that over 70 per cent of Rwandans are unbanked.

Only 24 per cent of the youth is banked, according to the central bank.

The details emerged at the 11th Alliance for Financial Inclusion Global Policy Forum 2019 in Kigali Thursday.

Rosemary Mbabazi, the Minister for Youth, said that the financial challenges that the youth face are aggravated by the lack of collateral and the stringent lending conditions.

“Every bank is rejecting them because they don’t have collateral,” she said, adding that they are considered to be risky clients.

“About 77 per cent of the youth in Rwanda are in economic activities, which means they are bankable. You can invest in them,” she said.

At least 11 per cent of the Rwandan population are financially excluded.

Globally, close to 1.7 billion are still financially excluded, with the figure higher among women and the youth.

And close to half a billion women don’t have access to financial services.

Mbabazi made the case for increasing access to financial services among the youth, saying that they were involved in income-generating activities.


Diane Karusisi, the Chief executive of Bank of Kigali Group, said that while traditional banks were are aware that they had not given much attention to the youth, the situation is now changing.

“I want to agree that, traditionally, commercial banks have not been there in terms of providing services to low-income people. This is a fact,” she noted.

But things are changing, she added, “and the pace of this change will accelerate in the near future.”

“The first thing is that technology is lowering the cost of transactions for banks. Today, the marginal cost for us to provide a service to a rural farmer is close to zero,” she said.

Amidst growing competition between financial institutions to lure people to their services, Karusisi indicated that banks were going back to the drawing board.

“Banks are now taking a long-term view of their customers. We want to look at the lifetime value of a client,” she said.

“In a country like Rwanda where more people are lifted out of poverty every year, you don’t want to wait for them to be in the middle class before selling to them,” she added.

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