26% of Rwandans are online, with mobile phone connectivity equivalent to 79%.
No Open Banking
Rwanda’s Vision and Strategy document, the Rwandan Payment Systems Strategy (2018-2024), outlined how the country was to aim towards a cashless society ‘through a world-class payment system that is secure, reliable, efficient, scalable, innovative, and promotes financial inclusion.’ Part of this vision included encouraging innovation, an examination of ‘the current state of interoperability’ to allow the free flow of funds across all payment systems, such as through banks and mobile wallets, and to also use APIs to allow for the ‘secure and reliable exchange of information’. These actions were deemed to be in development up to 2024. Part of this strategy involves the establishment of a Fintech incubator to support innovation and an Innovation Fun to support Fintech start-ups.
The 2019 regulation on Protection of Payment Service Users (Rwanda PSD), which closely follows the EU PSD2 in relation to payments, aims to facilitate data sharing and encourage data portability as part of encouraging new market entrants, innovation, and competition, but at present the legislation covers payments.
In October 2020, Rwanda approved the Draft Data Protection Law (Rwanda DPP). The stated purpose of the DPP is “to provide mechanisms through which the protection and privacy of personal data will be ensured in connection with its processing in Rwanda, and to ensure the free flow of non-personal data within and outside Rwanda by laying down rules relating its protection.” The Rwanda DPP follows the GDPR very closely, including the principles of data protection, which the DPP extends to apply to “any involved third party,” extraterritorial reach, data subject rights, and other key provisions of the GDPR that relate to consent.
The proportion of unbanked citizens, as of 2017, was 29% for women and 21% for men.
Rwanda targets achieving 100% formal financial inclusion by 2024, with the National Bank of Rwanda (NBR) leading financial inclusion demand surveys and collecting financial inclusion data. They aim to help include disabled people and refugees and target women and younger people.
The NBR’s 2020 Rwanda Finscope publication stated that only 10% of the population was employed in the formal sector, with the remaining population farming or in the informal sector, such as selling goods. Bank uptake is driven by transactional products, such as receiving an income through an account. The 2020 report stated that only 7% of the population did not use any financial services, but this includes people who use informal financial services such as savings groups (very common in rural areas, used by 80% of women, and 20% of women rely only on informal financial services), unregulated money lenders, and people using mobile money.
The percentage of adults taking less than 30 minutes to reach a money agent is 99% in urban areas and 30% in rural areas. To reach a bank branch within 30 minutes is 81% in urban and 12% in rural areas. A similar disparity is seen for insurance branches and ATMs; therefore, rural area infrastructure is a limitation on full financial inclusion.
90% of respondents in the Finscope survey stated that affordability is the main barrier to opening a bank account, whereas for opening a mobile money account, affordability is only 7% of the respondents’ reason for a barrier, but 48% of people had no product knowledge.
In February 2022, Temenos, the Swiss banking software company, announced that the Bank of Kigali Plc, Rwanda’s largest bank by assets and market share, had gone live on the Temenos platform, thereby taking a step towards modernising digital banking practices.
From 2014 to 2019, there was an increase in Fintech businesses from 17 to 44, with a report from the UN Capital Development Fund outlining, amongst other obstacles, that “the low levels of financial literacy and trust in digital solutions limits Fintech start-ups’ ability to reach a large proportion of potential customers”.
Rwanda ranked 80th out of 134 countries in Wiley’s Digital Skills Global Index 2021.