More efforts needed to improve financial literacy among women

One of challenges Rwanda is facing as a developing country is increasing savings and investment to promote economic growth.
Dr Jaya Shukla
Dr Jaya Shukla

One of challenges Rwanda is facing as a developing country is increasing savings and investment to promote economic growth. These two drivers of economic growth are dependent on the level of financial awareness and financial literacy among citizens. Financial illiteracy is also a big barrier to financial inclusion and entrepreneurship among women.

Rwanda faces low levels of financial literacy. According to report based on 2013 National Financial Education Strategy for Rwanda, less than 50 per cent of Rwandans can give correct answers to all four numeracy questions, which test addition, subtraction, multiplication, and division. There is also a disconnect between Rwandans’ knowledge and awareness of money management practices and their application.


Financial literacy in Rwanda is implemented by Ministry of Finance and Economic Planning through implementation of National Financial Education Strategy. Despite the progress made in the implementation of this strategy, there is need for further strengthening of financial education in the country because financial literacy is still low among both males and females. Though some organisations, like Equity Bank and Association of Microfinance Institutions in Rwanda (AMIR), are working to change this situation, the levels of financial literacy are much lower among females in Rwanda compared to males. The situation is worse among rural women compared to their urban-based counterparts. According to available figures, only 35 per cent of women have bank accounts, and the majority of them do not have access to formal banking services. There is also low level of understanding of financial operations among women.


Low level of financial literacy among women affects their inclusion. Besides, women have high life expectancy compared to men, which means they have more time after retirement. Therefore, financial literacy becomes an important issue for their financial security in old age.


Financial literacy globally

Globally also there is gender disparity in financial literacy. Financial literacy all over the world is low for women as compared to men. According to Standard & Poor’s global financial survey on financial literacy conducted in 2014 in 140 countries, men (35 per cent) are more financially literate than women (30 per cent) worldwide.

The survey was based on knowledge of four basic financial concepts of inflation, numeracy, risk diversification and interest compounding. Existing gender disparity in financial literacy is also due to fact that in households financial decisions are taken by males. Studies also show that women have lower self-confidence than men in financial matters.

Way forward

There is need to develop a well-designed strategy for financial education and financial literacy in rural and urban areas. According to a study conducted in India, well designed long-term and short trainings and sensitisation programmes are effective in enhancing financial literacy among women, especially in rural areas.

Financial institutions, including commercial banks and cooperatives, should play an important role for such initiatives to be successful. There is also need for financial literacy programnes to be coordinated by commercial banks in urban areas and SACCOs in rural areas.

The writer is the Acting Co-ordiator, Department of Agriculture and Resource Economics, Jomo Kenyatta University of Agriculture and Technology - Kigali Campus

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