Rwanda FinScope Survey 2024 16 • Fintechs are essential to expanding the availability of financial services and encourag- ing market competition, which benefits consumers. The supply of loans, particularly to farmers and MSMEs, is one area where fintechs may potentially have a disruptive im- pact in this market. Policy interventions that seek to expand access to credit for these segments are a priority for economic growth. Greater use of the available guaranteed programmes will encourage banks to lend to creditworthy enterprises and farmers who may lack a credit track record. • FSPs and key stakeholders should continue to understand the market and increase up- take of second-generation products through: I. Goal-Based Savings and Insurance: Offer savings or insurance products tied to specific goals, such as education, farming, or housing. II. Alternative Credit Scoring: Use alternative credit scoring models to increase ac- cess to credit for underserved populations and offer digital lending platforms for easy access to credit. III. Microinsurance: Offer microinsurance products for low-income individuals and provide financial education to help individuals understand the importance of insurance. IV. Auto-Enrollment in Pension Plans: Continue the excellent work done under Ejo Heza and Implement auto-enrolment in pension plans for employees to increase re- tirement savings. V. Financial Education Initiatives: Implement initiatives that improve financial educa- tion and literacy, empowering individuals to make informed financial decisions. • Continued monitoring and evaluation of financial inclusion targets. Measuring finan- cial health indicators on the quality and impact of financial services needs to be the cornerstone and baseline of this priority area. Improved financial health indicators will support high-quality and consumer-centric product initiatives. Additionally, ensuring that financial inclusion priorities are streamlined in government ministries and agencies as well as development partner programmes (promoting sector and policy cooperation and coordination is required).

Rwanda FinScope Survey 2024
17 1 INTRODUCTION Rwanda FinScope Survey 2024
18 1.1 Background Financial inclusion is recognised as a key driver in stimulating and encouraging inclusive eco- nomic growth. It lowers poverty, boosts development, evenly distributes income, and pre- serves financial system stability, thereby strongly supporting national-level objectives. Key stakeholders in the financial services sector acknowledge financial inclusion as a crucial in- strument for sustainable development, which unlocks the power of finance to drive econom- ic growth. Many countries, especially in Africa, have implemented policies and initiatives to advance financial inclusion, including access, usage, and quality. Despite notable achieve- ments, the continent still lags in this area. The Government of Rwanda places high priority on financial sector development, recognising it as a vital element of its long-term plan to positively transform Rwandan economy and improve the livilihoods of low income earners. In Rwanda, financial inclusion has been one of the priority areas (priority area 5) 1 in achieving the National Strategy for Transformation (NST1), which has been the key pillar in overseeing the crossover from Vision 2020 to Vision 2050. Vision 2050 aims to elevate Rwanda to high living standards by the middle of the 21st century, ensuring high-quality livelihoods. The fi- nancial sector is shaped by several national aspirations and international goals embodied in policy declarations and plans such as Rwanda Vision 2020, Vision 2050, and the Seven-Year Government Programme/National Strategy for Transformation (2017-2024). The Government launched the Financial Sector Development Programme (FSDP II) in 2008 with the primary aspiration of cultivating a stable and sound financial sector that is sufficiently deep and broad, capable of efficiently mobilising and allocating resources to address the de- velopment needs of the economy and moving towards a poverty-free Rwanda. The FSDP III, which starts in 2024, has focused on the following critical priorities most of which are continuing priorities 2: Mobilisation of savings (short, medium and long-term) Financial inclusion – improve uptake and usage of financial services Position Rwanda as a cashless economy Establishing and maintaining Rwanda as an international financial services centre (financial hub). Private sector financing The National Strategy for Transformation and the Financial Sector Development Strategic Plan are both set to conclude in 2024. However, access to and use of financial services will remain one of the priorities for achieving the Universal Access to Financial Services as stared in the Vision 2050. Access to Finance Rwanda (AFR), a market catalyst, was formed on the premise that a sound and growing financial sector is essential to underpinning Rwanda’s ambitious development targets. AFR aligns its interventions to national policy frameworks, including the Financial Sector Development Programme (FSDP), National Financial Inclusion Strategy (NFIS) and the National Strategy for Transformation (NST1), in support of the Government of Rwanda’s development objectives. ¹http://www.minecofin.gov.rw/fileadmin/user_upload/MINECOFIN_Documents/NST_A5_booklet_final_2.04.19_ WEB.pdf 2 MINECOFIN, 2024. FSDP III blueprint draft. Rwanda FinScope Survey 2024
19 Rwanda aimed to achieve100% financial inclusion by 2024 Therefore, to evaluate financial inclusion progress, interventions must be informed by comprehensive diagnostics, including demand- and supply-side surveys. The FinScope survey 2024 offers an opportunity to inform the design of the next generation of mid-term development strategies in Rwanda. 1.2 FinScope surveys FinScope is a research tool that was developed by FinMark Trust (a sister company to Ac - cess to Finance Rwanda and based in South Africa) to address the need for credible financial sector information. The FinScope survey provides a holistic overview and understanding of how individuals generate income and manage their financial lives. It identifies the factors that drive financial behaviour and those that prevent individuals from using financial products and services. Implementing the FinScope survey regularly further provides the opportunity to assess whether, and how, a country’s situation changes. It offers insights to guide policy- makers and regulators on how to address or respond to some of the challenges they face in meeting financial inclusion targets and increasing inclusion. It also provides financial service providers with crucial strategic information regarding their target markets and the financial services these markets need, enabling them to extend their reach and broaden their range of services. FinScope surveys have been conducted in 25 African countries and 10 beyond the African continent. Rwanda FinScope: The first Rwanda Finscope Survey, implemented in 2008, was driven by a lack of credible information to guide policy interventions and financial service providers in their efforts to expand the reach and depth of the Rwandan financial system. key stakehold- ers, advocated for a repeat FinScope survey to measure and monitor progress, and it has been established as a practice within AFR that the FinScope survey is conducted every four years. AFR therefore commissioned follow-up surveys in 2012, 2016 and 2020. The fifth FinScope survey was initiated by AFR, aiming to sustainably track progress in finan- cial inclusion. FinScope 2024 provides valuable insights into the extent of financial inclusion among adult Rwandans, particularly in terms of access to formal accounts through various sector interventions. This survey will shed light on the impact of these efforts, guiding future initiatives to enhance financial inclusion and promote economic development in Rwanda. 1.3 Rwanda FinScope 2024 survey objectives The FinScope 2024 survey is unique as it was implemented after the Covid-19 pandemic, in- cludes underserved segments of the population in Rwanda, namely refugees, and coincides with the conclusion of the National Strategy for Transformation (NST1) and the Financial Sec- tor Development Strategic Plan. Therefore, the specific objectives of the FinScope Rwanda Consumer survey are summarised as follows: To describe the levels of financial inclusion (i.e. levels of access to financial products and services – both formal and informal). To describe the landscape of access (i.e. the type of products and services used by financially included individuals). Assess the extent to which Covid-19 pandemic has affected the financial inclusion in Rwanda (from 2020). Track the financial health progress since the 2020 baseline. Rwanda FinScope Survey 2024
20 Measuring the progress and targets set in the National Strategy for Transformation (NST1) and the Financial Sector Development Strategic Plan. To assess the extent to which policies put in place to curb the effects of the volatile global and domestic macroeconomic landscape have affected financial inclusion. To provide indicators – offering an opportunity to inform the design of the next gen- eration of mid-term development strategies in Rwanda. 1.4 Methodology and survey design As mentioned earlier, the FinScope survey 2024 aimed to gather information on how house- holds including refugees, access financial services and utilise them to enhance their opera- tions. However, the refugee modules or survey has been treated as stand-alone and a separate report will be developed. The target population for the Rwanda State of Financial Inclusion 2024 survey consisted of eligible members of private households in Rwanda. The eligible members of the population living in institutions, such as hospitals, hostels, police barracks, and prisons, were not included in this survey. However, private households within institutional settings, such as teachers’ houses on school premises, and refugee camps were included. The sample design used a stratified three-stage cluster sample. The first stage units were the Primary Sampling Units (PSUs), the second were the households, and the third were the eli- gible members. These individuals, at the time of the survey, were 16 years or older, available during the survey’s duration, mentally and physically capable of being interviewed and had resided in the selected household for at least six months preceding the survey. The age limit for eligibility criteria was based on the fact that only individuals aged 16 years or older are officially authorised to obtain personal formal financial products (such as opening a personal bank account or mobile wallet) from formal financial institutions in Rwanda, making them a target population of the financial sector. Only one individual per selected household was interviewed. 1.4.1 Sampling frame for FinScope 2024 The sampling for households was based on a compromise between maximizing the efficien- cy of estimating a national parameter – which would use a Neyman allocation – and having reasonable precision at the district level. The steps taken were as follows: 1 Average the sample sizes from a nationally efficient sample and efficient district-level samples. 2 Set a minimum sample size of 400 adults per district. 3 Round the samples to the nearest 16, to determine the number of clusters per district. 4 Adjust down the sample for Gasabo so that the sample remains at 875 clusters (i.e., at 14,000 adults). The result is that the samples would be between 400 and 440 in sixteen of the thirty districts, and greater than 600 in just two districts (Gasabo and Nyagatare, which also happen to be the districts with the largest adult populations). The procedure is as follows to identify which adults will be interviewed: Rwanda FinScope Survey 2024 21 1 The FINSCOPE 2024 national survey involved sampling of 14,000 households. These households were selected from a pool of 875 Enumeration Areas (EAs, or clusters). The selection process utilized the NISR Master sample, which is a subsample of the Rwanda Population and Housing Census 2022 (RPHC 2022) and consists of 4,000 EAs. 2 For each district, every EA was ordered by urban and rural areas, and within these by sector, cell, and village following a clear geographic pattern (north to south). 3 A cumulative measure of the number of households was created, using this ordered list. 4 The district sampling interval was calculated as:

= Id Nd Vd Number of households in district Number of EAs to be selected in district

5 A random number between zero and I_d, was picked and the associated EA selected; then increased this number by I_d and picked the next EA, and so on. 6 Within each d EA, a list of all households was created and the sampling interval for each EA, given by

=

Idv Ndv Vdv Number of households listed in EA Number of households to be selected in EA (i.e.16) A random number between zero and I_v, was picked and associated households selected, and then increment by the EA sampling interval to pick the other households. Within the selected households, qualifying individuals were randomly selected using a Kish grid and programmed in CAPI. 13,994 interviews were achieved, and all questions were translated in Kinyarwanda. 1.4.2 Questionnaire design and content The questionnaire design phase included refining the Rwanda FinScope Consumer 2024 questionnaire to take into account changes and developments in the financial sector since the FinScope survey 2020 while ensuring that the questionnaire includes core questions to enable comparison. The questionnaire was also shared with the steering committee and other stakeholder groups for input and comments. The questionnaire in English was translated into Kinyarwanda. The finalisation was done after the training and field pilots had been completed. 1.4.3 Disclaimer Due to rounding off, percentages presented throughout this report may not always add up 100%. 1.5 Survey demographics The FinScope survey captures a range of information including data on individuals, as well as some household information. This comprehensive profile of the population has the potential to assist in determining financial consumer education needs for the various strata of society as well getting a deeper understanding of our population and develop effective strategies. The sample was weighted to reflect the population size in line with the latest housing popu- lation census. There are about 8,2 million adult Rwandans aged 16 years and older, reflecting