Rwanda set to hold Inclusive Fintech Forum 2024 as matters arising on financial inclusion

The Kigali International Financial Centre (KIFC) has announced the second edition of the Inclusive Fintech Forum (IFF) scheduled to happen between August 26 and 28, 2024, in collaboration with the National Bank of Rwanda (NBR) and Elevandi. The KIFC, founded in 2020 as a subsidiary of Rwanda Finance Limited, has also built partnerships with the Qatar Financial Centre, Britain’s Jersey Finance, and Singapore’s Monetary Authority.

For its inaugural edition held in the city of Kigali in June 2023, the Inclusive Fintech Forum had two African Presidents, H.E Paul Kagame and H.E Hakainde Hichilema of the Republics of Rwanda and Zambia, respectively, take the front seat rows welcoming investors, fintech founders, VC funds and international policymakers to the emerging financial center of Kigali.

Big push to woo fintechs to Kigali

Before that time, the Government of Rwanda had rolled out its Fintech Strategy Roadmap 2022-2027 to establish and demonstrate to the world its strong commitment to becoming the next choice fintech destination in Africa. This development has made Kigali ranked twice as the only African IFC likely to be more significant, according to the Global Financial Centers Index (GFCI) ranking.

Africa’s biggest fintechs like Flutterwave, Chipper Cash, MFS Africa, and NALA have leveraged this regulatory harmonization to acquire the Electronic Money Issuer (EMI) and Remittance licenses to set up shop and make Rwanda a settlement hub for payment operations in the East African region while processing cross-border transactions. All thanks to the shortened timeline to 1-2 months, making it easier for fintech startups to acquire operating licenses compared to 6 months – 1 year in Kenya and Nigeria.

“Rwanda is big for us because it is one of the only markets where we have every license you can think of. It’s not about the market size; it’s about market readiness. They’re ready here.” the Flutterwave CEO, Olugbenga Agboola, told TechCabal during the Inclusive Fintech Forum last year.

Also read: Africa Business Heroes Opens Submissions for 2024 Edition

The state of fintech funding in Rwanda

While Rwanda is trying to become the leading and premier Pan-African fintech hub with this new strategy roadmap to attract fintechs to pilot their innovations before expanding across Africa, it has received very little VC funding compared to other African countries.

According to historical trends analyzed by TechGyant, Rwanda has been mainly at the tail end of venture capital funds going to Fintechs, unlike other larger markets in the East African region like Kenya and Uganda. In actual numbers, Rwanda had only 0.13% of VC funding into East Africa’s fintech ecosystem in 2022, amounting to just $300,000 out of the $228 million raised.

Closing Rwanda’s financial exclusion gap in credit

With a solid legal and governance framework for the operations of key players, including commercial banks, mobile network operators, microfinance institutions, and Savings and Credit Co-operatives (SACCOs), Rwanda now has way lower financial exclusion rates than fintech active markets like Kenya and Nigeria. However, despite these financial inclusion achievements, gaps around credit still exist in Rwanda. Only 22% of Rwandan adults have used formal credit, which has the potential to boost their consumer spending power while scaling their small and medium-sized businesses.

According to Rwanda’s National Institute of Statistics (NISR) and FinScope, this low formal credit adoption rate (22%) is dragging behind other financial services like payments and savings, which stand at 43% and 54%, respectively. Also, 49% of borrowers in Rwanda use informal credit alternatives like savings groups. 78% of Rwandans hadn’t borrowed from any formal institution despite MTN’s MoKash loans only requiring borrowers to have an active mobile wallet account and at least RWF100.

Also read: Ellie Habimana is named the new Managing Director of Norrsken East Africa.

The fintech opportunity

These credit access barriers are unmet financial needs of individuals and small businesses beyond having a basic financial account and can be lowered by technology. They present golden opportunities for innovative fintech startups to tap into and explore solutions to boost financial inclusion and hit the sweet spots when expanding to the Rwandan market. Fintech companies, in particular, have the opportunity to digitize the operations of informal savings groups in the country and target rural communities while appropriately managing credit default risks. 

In the end, Rwanda’s small size of 13 million and GDP of about $11 billion are no longer limiting factors for new entrants into its fintech market. The country’s strong regulatory reforms and an ambitious push to become a top-ranking international financial center have won the appeal of African fintech startups that can achieve economies of scale.