The ideals of a cashless economy are one that still misses many an individual, including those in the business sector. The result is that banks, for instance, are only perceived as entities that can be used when one needs a loan. Where there is no such need, people do not even open bank accounts.
As such, there are still more than 30 per cent of the global population termed as “unbanked individuals” despite a significant improvement of 20 per cent after 700 million people became account holders at banks, other financial institutions, or mobile money service providers between 2011 and 2014.
The World Bank’s Global Findex report, released on Wednesday, says technology is the driving force behind the growing number of banked individuals.
The government has been pursuing a deliberate policy that sees development being fast-tracked along the technology grid. However, less than 50 per cent of the population is banked in the formal financial sector, and the plan is to have at least 80 per cent by 2017 and encourage cashless transactions in the economy.
Being unbanked means lacking access to innovative ideas such as mobile money, credit cards, Internet, among others.
For local economists, being bankable has its highs: going cashless.
A cashless economy is one in which the transaction of goods and services is done through electronic money media, either through credit and debit cards, direct transfers from one account to another, smart cards, mobile payment systems, and other technologies.
While launching new Rwf2000 and Rwf5000 banknotes last year, central bank governor John Rwangombwa made a case for going cashless, saying repeated handling of money makes them lose their value.
This means that as the government joins the world in its ambitious goal of universal financial access by 2020, it should focus on going cashless.
With a cashless economy, there would also be a reduction in the cost of printing and transporting currency notes along the value chain as well as avoidance of crime.