Rwanda’s efforts towards increasing fintech use and financial access is paying off as the country surpassed it’s targets now achieving over 80 per cent penetration. CNBC Africa spoke to John Rwangombwa, Governor, National Bank of Rwanda for more.
Rwanda’s efforts towards increasing fintech use and financial access is paying off as the country surpassed it’s targets now achieving over 80 per cent penetration. CNBC Africa spoke to John Rwangombwa, Central Bank Governor, National Bank of Rwanda for more.' We've seen policy rates reduce in Uganda, in Kenya and so nothing unusual has happened this year. And despite the wars that are outside there, that you know we used to talk about the Red Sea issues, but they didn't rematerialise as big as we had feared. So we hope going into 2025 that the tourists climate change and geopolitical challenges, people are talking of the change in government in the US, so we hope to destabilise globalisation. So these are uncertainties, that's the world we live in today and the good thing is we are all growing our analytical capacities and are able to project what's going to happen and see what tools to use to counter whatever is happening. So we're talking of droughts, I was reading there's fear of floods in the Horn of Africa, so we expect to have more rainfall coming, so we don't know how big that will be affecting agriculture. But generally speaking we've had a good year across the region and as you see the East African bloc, in fact even in terms of the economic growth is going to be much higher than all the other parts of Africa. We've seen tremendous astronomical performance on the digital payments and digital innovation as well and I'd like your comment on this, is this an area that you're excited about in regards to the milestones that the country is achieving? And also if you could make a quick comment really on your overall assessment on how the franc has performed and whether will it be bouncing back anytime soon? On the digital front, digital payments, we are happy with what is happening, at least we see the uptick of use of digital financial services has been really growing exponentially as you said, which is good. But we are still far, we are still far in terms of the percentage of our financial transactions handled by cash still way above what we would want to see. But we are happy that as stakeholders, government, private sector, we engaged in education, we engaged in awareness campaigns and so we expect this to continue. Again, as I said in the presentation, the R-Suite that is supposed to provide interoperability solutions has achieved a lot on this journey, so we expect to see all these digital channels connected next year and that will have even a bigger impact going forward. So yes, the developments are positive and we expect to see even bigger things going forward. We have a government that has decided to go digital in everything and that is supporting the drive to move to cashless. On the currency, yes we said we've had pressures on the exchange market because of the high and increasing trade deficit, but the good thing is this year we had increased revenues from one, tourism remittances and FDI. So that has reduced the pressures from what we had last year, very high depreciation of 18%, this year we expect it to be around 9.4% and we expect this, if normalization continues, at least we'll go back to the 5% depreciation where it was 2%.
Theme: Rwanda's success in achieving over 80% penetration in financial inclusion and fintech innovation, with a focus on digital payments and currency performance.
Rwanda's journey towards financial inclusion and embracing fintech innovation has proven to be a success, with the country surpassing its targets and achieving over 80 per cent penetration in these areas. CNBC Africa recently had the opportunity to speak with John Rwangombwa, the Governor of the National Bank of Rwanda, to delve deeper into these advancements. Rwanda's financial landscape has seen significant progress in recent years, with a notable increase in the use of digital payments and financial services. Governor Rwangombwa acknowledged that while there is still a reliance on cash for financial transactions, the shift towards digital channels is on the rise. The country's commitment to education and awareness campaigns has played a crucial role in driving this digital transformation. Rwanda's efforts in implementing interoperability solutions, such as the R-Suite, have also contributed to the growth of digital channels and are set to have an even bigger impact in the future. The government's digitalization agenda has further supported the transition to a cashless economy, signaling a positive outlook for Rwanda's financial landscape. In terms of the currency performance, Governor Rwangombwa mentioned that Rwanda faced pressures on the exchange market due to a high and increasing trade deficit. However, the country experienced a boost in revenues from tourism, remittances, and foreign direct investment, which helped alleviate some of these pressures. This year, Rwanda anticipates a reduced depreciation rate of around 9.4%, compared to the significant 18% depreciation seen last year. With continued normalization, the country aims to return to a more stable 5% depreciation rate. The overall economic climate in East Africa, including Rwanda, has been favorable, showcasing robust growth and resilience amidst global uncertainties. The region has seen positive trends in digital payments and innovations, setting a promising foundation for future advancements. Governor Rwangombwa emphasized the importance of addressing challenges such as climate change, geopolitical shifts, and global economic dynamics, highlighting the need for proactive measures and strategic planning. As Rwanda continues its journey towards financial inclusion and fintech excellence, the collaborative efforts of the government, private sector, and stakeholders are pivotal in driving sustainable growth and development.
"We are still far in terms of the percentage of our financial transactions handled by cash...we expect this to continue."
['Rwanda', 'financial inclusion', 'fintech innovation', 'digital payments', 'economic growth', 'R-Suite', 'Governor of National Bank of Rwanda']