Rwanda to Go Cashless By 2024

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By Peterson Tumwebaze
The Rwanda central bank is currently conducting a countrywide sensitisation campaign to raise awareness among the business community, professional groups and general public about the benefits of embracing electronic payment (e-payment) facilities.

The drive is part of efforts to deepen use and access to e-payment systems like credit cards and e-wallets and hence fast-track the realisation of Rwanda’s goal of being a cashless economy by 2024.
However, experts say the cost of transactions is still high which discourages many people from using e-payment services provided by banks, telecoms and businesses. Addressing sector players during a cocktail dinner organised by the Rwanda Bankers Association (RBA) in Kigali recently, John Rwangombwa, the central bank governor, said reviewing downwards the user fees would help boost uptake and use of the e-payment solutions on the market.

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The central bank chief was optimistic that the economy will continue to post positive growth, providing bankers an opportunity to capture the untapped market.
The 2016 McKinsey Report estimated digital financial service to have potential of boosting annual GDP of all emerging economies, including Rwanda, by at least $3.7 trillion by 2025 or by 6 per cent above projected GDP.
No turning back
Financial sector players have no choice but to innovative and also adopt fintech tools to be more competitive, said Maurice Toroitich, the chairman of the Rwanda Bankers Association.

“Embracing fintech facilities like electronic payment systems is no longer a choice but a must. We must remain relevant to both our customers and ensure shareholders have a good return,” Toroitich, who is also the BPR chief, said while speaking at the bankers’ dinner.
Celestin Nsengiyaremye, a financial analyst in Kigali, says technological changes including availability of the Internet, digitisation of bank products will influence and attract users, thus increasing financial inclusion.
Last month, the central bank launched a cashless economy drive to create awareness among members of the private sector as part of the strategy to expedite the usage of electronic payment solutions.
Rwangombwa said the campaign seeks to encourage use e-payment systems among business community and help boost efforts towards achieving a cashless economy and deepen financial inclusion.

According to central bank estimates, business community is losing up to 6 per cent in transactions done using hard cash as opposed to only 2 per cent loss incurred when transacted electronically. The central bank’s e-payments campaign continues in Muhanga and Huye districts in Southern Province this week.
According to the Finscope report released last year, formal inclusion was at 68 per cent of which mobile money added to 23 per cent.
Experts believe that with more and more digital financial service products, economies like Rwanda will at least enjoy low cost of providing financial services by up to 90 per cent, enabling providers to serve lower income customers profitably.

It will equally attract an additional $4.2 trillion in new deposits into the financial system, as more people obtain access to accounts and shift their savings from informal mechanisms.
Source: New Times

READ: Uganda is steadily moving towards a cashless economy

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