Mbishibishi Desange is a BK client who is set receive a Zamuka Mugore loan to inject into her banana selling business in Nyabugogo market, Kigali
Women in Rwanda have long been left out of financial products and services that are tailored to their roles as mothers, entrepreneurs, employees and sometime breadwinners.
“According to the 2016 FinScope survey, out of the 69% respondents that said they use formal financial services, there was a gap of 11% between the women and the men. That’s why we needed initiatives that can help us understand women financial services better,” says Waringa Kibe, the AFR Country Director.
Access to Finance Rwanda (AFR) is a not for profit organisation that stimulates financial sector development in Rwanda through supporting the players to be more responsive to the needs of the majority, especially low income people.
Financial institutions also realise that there is potential in the sector as far as banking women.
“Women are about 35% of our clients. We believe more could be done to on-board more women as they are the majority of the population”, says Bank of Kigali, Chief Commercial officer, Vincent Gatete.
“Much of the money women have access to circulates informally through saving groups. We need to find a way to channel it into the formal banking sector,” says Gasigwa Festus, the Managing Director of COPEDU, a local microfinance institution.
Whatever their need, low income women seem to find money while avoiding main stream solutions.
“Whenever I needed money for my business, I would go and borrow from a friend. If I got 500,000Rwf, I would pay back 650,000Rwf. You see that interest is high,” said Dukunde Jeanne, a wedding decorator in Kigali.
Demystifying product design
In a move to catalyse women banking, Access to finance Rwanda issued a call for proposals in July 2017, to which three institutions expressed interest. The trio include a teachers’ SACCO branded as Umwalimu SACCO, a well-established commercial bank called Bank of Kigali and Micro Finance Institution known as COPEDU.
“We were looking for financial institutions that would be interested to go into the sphere of supporting the development of women’s financial services,” said Roselyne Uwamahoro, the AFR Head of SACCOs and Saving Group Development.
Access to Finance Rwanda used data to support the Financial Service Providers to understand the needs of their clients and address their internal challenges.
“There is a business case in banking women. Women need to feel understood, the product needs to be well developed based on their needs; in terms of convenience, cost, how the product is explained in a language they easily understand, in a place that is convenient for them to be,” says the AFR country Director.
For technical training and support, AFR partnered with MicroSave, an international financial inclusion firm that specialises in market-led and scalable financial services and products.
“The training, dubbed Market Insights for Innovation and Design, sought to demystify product design. We trained the staff and local consultants to enhance their understanding of the behavioural insights of women when they are selecting financial products”, says Joyce Murithi, a Financial Inclusion Specialist at Microsave.
As part of their training with Microsave, the Financial Service Providers were engaged in a market survey to discover the dynamics affecting the financial inclusion of women. Respondents cited lack of women-centred financial products, poor customer care, tedious loan application processes and high interest rates as reasons of avoiding banks.
Bank of Kigali
“A number of women provided input for the product development process and we ended up with the Zamuka Mugore (loosely translated as – Woman, Progress) product,” Ms. Rita Kanyana, the product development manager for BK said, adding that the product targets a visionary entrepreneur with a well-articulated growth plan for her business. She should also be a member of a saving group to demonstrate her commitment to the principle of saving and investment.
Bank of Kigali has embraced direct selling, contrary to waiting for walk-in business.
“Traditionally we waited for them to come, but something needed to change,” Mr Gatete said.
“We go to a market in teams of three to five and just preach about Zamuka Mugore”, said Jimmy Ndabaramye, business manager for BK.
Women with small businesses are glad that someone is listening and they are already taking advantage of the new product.
“This product will enable us to work for ourselves and not other people,” said Mbishibishi Desange, a BK client when the BK team visited her at her premises at Nyabugogo market. She explained that she borrows her capital from a loan shark weekly and repays along with half the profit.
Following their market survey, Umwalimu SACCO set out to address the needs of female teachers through the Nzigamira Niige (Saving for education) product.
“We interviewed women teachers who told us they need a product that allows them to save money and borrow against savings to pay school fees,” said Seraphine Uwimbabazi, the marketing manager for Umwalimu SACCO.
The Financial Service Providers in the project pilot have begun shifting their business to keep their clients happy. Ms. Uwambaje explained how she intends to keep her members in the SACCO.
“The teachers told us they have saving groups where they borrow money at 10% per month. With us they save for three months and borrow three times what they have saved at an interest rate of 11% per year”.
Teachers countrywide got wind of the new product during the commemoration of the International Teachers’ Day and were full of praise.
“They have thought about us. Now my children don’t have to miss school when I have no money”, said Bugenimana Marie-Rose, a teacher at GS Bitsibo in Kamonyi.
COPEDU survey respondents asked for a quick loan product that meets emergency capital needs. The response to that demand was Umurabyo Uratinda (quick business loan).
“For our clients who already have loans that they are servicing but need emergency funds, we don’t require collateral from them so the loan application takes three working days,” said Caritas Uwamariya, the head of marketing and credit in Copedu.
The emergency loan product is as popular with clients as it is effective for COPEDU.
“Working with AFR in this project has enabled us to get back clients that were inactive”, the Copedu MD, Gasiba Festus said.
The manager of the flagship branch, Kigali Market, Jean Paul Bugirimfura agreed, saying there had been over 1000 applications for Umurabyo Uratinda loans in the first month.
“I no longer worry about clearing my goods from Magerwa. All I need is to fill out a form and in three days I get money to clear my goods,” testified Dukunde Jeanne, a COPEDU client based in Kigali market whose business has benefitted from the loan.
To ensure technical support for the FSPs in this pilot phase and beyond, AFR included local consultants in the Microsave training to support each FSP.
“The training we received has enabled me to support Umwalimu Sacco staff in the implementation of Nzigamira Niige and I am able to solve any issues that arise” said Patricia Uwimbabazi, a local consultant.
“AFR is really supportive in making sure that the impact of the training spreads and is sustained” Francis Ndayiziga, the local consultant attached to Copedu.
From a social impact perspective, the project will enable low and middle-income women to access financial services in a way that reduces vulnerability to financial shocks and increases their capacity to make productive investments, hence contributing to the economy. If the project is scaled up, the end result will be sustainable women-led SMEs and growth in financial inclusion for women in Rwanda.