World Bank backs Rwanda’s financial inclusion efforts with new funding

The World Bank Group yesterday launched a $2.25 million (around Rwf1.5 billion) programme to mobilise technical capacity and knowledge to help Rwanda achieve its financial inclusion targets. Financial inclusion consists of bringing low-income households and small businesses into the formal financial sector, protecting their assets, and helping them to manage financial risks and access credit. The Bank’s Financial Inclusion Support Framework (FISF) programme for Rwanda is a trust fund executed by the World Bank Group and financed by the Dutch Government. “Access to affordable financial services can make a big difference in people’s lives. It can help them to take better charge of their future. I am very proud that the Netherlands supports this important programme,” said Leoni Cuelenaere, Ambassador of the Netherlands to Rwanda. The announcement came as the National Bank of Rwanda celebrated its 50 years of existence, with President Paul Kagame telling an anniversary conference yesterday that there was need to fast track financial inclusion. Announcing the fund in Kigali, the Managing Director and World Bank Group Chief Financial Officer, Bertrand Badré, said Rwanda was the first country in Sub-Saharan Africa, and among one of the first two globally, to benefit from the financial inclusion fund. “This programme will help Rwanda meet its ambitious financial inclusion goal, through technical assistance, advisory services, and capacity building for far-reaching policy and regulatory reforms as well as critical financial infrastructure development,” he said. The programme will focus on priority areas expected to have the greatest impact based on the country’s financial inclusion agenda. They include; Micro, Small and Medium Enterprise Finance; Financial Consumer Protection; Financial Literacy; Payment Systems, and Financial Infrastructure. The Bank said the FISF programme is fully aligned with the Government’s Financial Sector Development Plan, FSDPII. In line with FSDPII, the FISF programme will partner with and support Rwanda to achieve its financial inclusion goal, with a particular focus on improving access, usage and quality of financial services, especially for underserved populations in rural areas and low-income segments, officials said. Central bank figures show that national financial inclusion doubled from 21 per cent to 42 per cent over the last five years. Central bank governor John Rwangombwa, says the rate of financial inclusion will be nearly doubled over the next three years. “Rwanda has set an ambitious objective of reaching 80 per cent of formal financial inclusion by 2017, and I am pleased to say that significant progress has already been made towards achieving this target,” Rwangombwa said. The World Bank Group said in a statement that financial inclusion is a priority for the Bank in order to meet the challenge of achieving Universal Financial Access globally by 2020. “Financial inclusion is vital to help overcome the enormous challenge of eradicating extreme poverty and increasing shared prosperity.” The FISF is the latest addition to the World Bank Group’s engagements in Rwanda, which include working with the central bank to strengthen financial stability and supporting financial and private sector development in the country.