Why Rwanda tops EIU business-friendly survey (OPINION PIECE)


Rwanda has topped its East African peers as the country with the most conducive environment for enabling its citizens to obtain access to financial services.

It is followed by Tanzania, Kenya and Uganda, according to a new survey by the Economist Intelligence Unit (EIU).

The survey findings, which were released last weekshow that globally Colombia offers the best environment for financial inclusion followed by Peru, Uruguay, India and Philippines.

In contrast, Sierra Leone has the worst environment for financial inclusion followed by Democratic Republic of Congo, Chad, Haiti and Myanmar.
The EIU survey sampled 55 countries worldwide.


The top performing countries in financial inclusion have demonstrated government and policy support for financial inclusion, prioritised financial stability and integrity, and fostered inclusion through a variety of products and outlets.

These countries have put in place market-entry regulations that do not shut out new players that serve low- and middle-income populations. They have made it easier for customers to gain access to various financial products and outlets.

Rwanda, Tanzania and Kenya were among the top countries globally where governments have tried to put in place policies to encourage financial inclusion.

However, the report argues that government support on its own is not sufficient to achieve financial inclusion.

It singles out Kenya, Rwanda and Tanzania as countries in the EAC that have opened up the market for e-money issuers.

Mobile money

For instance, Tanzania has led interoperability of mobile money platforms in Africa, allowing users to send and receive money on any mobile network.

Rwanda has also recently enabled such transfers, ahead of a planned crossborder interoperable mobile money system that would connect member states of the East African Community.

Interoperability allows different systems to communicate with one another.

Kenya has taken advantage of wide acceptance of mobile money to extend its services through an e-government platform.

Mobile money represents more than 90 per cent of payments via the platform and more than 85 per cent of payments for parking fees, single business permits and licences.

The Rwandan government has consistently promoted financial inclusion, with its Financial Inclusion Programme for 2016-2020 driven by the Ministry of Finance and Economic Planning.

Unbanked population

The government has also established the Rwanda Co-operative Agency that supervises savings and credit organisations. It works closely with the National Bank of Rwanda.

There are also encouraging policies such as the national identity card programme, which has distributed identity cards to 91 per cent of the adult population.

Legislation for start-ups in Rwanda is also strong and supportive, prompting significant growth in the information technology sector, and the national financial authorities have fostered innovation through these varied approaches.

However, the survey notes that despite these efforts, a large portion of the Rwandan population remains unbanked.

According to the World Bank, in 2017 only 36 per cent of the adult population had bank accounts at financial institutions, and 31 per cent had mobile money accounts.

Barriers to financial inclusion in Rwanda include the fact that a large portion of the adult population is still unbanked, and only a small portion has e-money accounts.

There is still a shortage of products that cater to the low-income market and remote account opening requirements are still relatively strict.

According to the report, there are no data or privacy laws in Rwanda and because the country is one of the fastest-growing economies in the area of information technology, personal information is at risk.

Financial illiteracy is also a big barrier to financial inclusion and entrepreneurship among women.

In Tanzania, the government recently updated its Financial Inclusion Strategy to focus on the next five years (2018-2022).

This strategy includes a digital approach.

It is aimed at making financial products and services better suited to the needs of individuals and businesses, which are consistent with supporting better livelihoods and job creation.


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