Digitizing Financial Services

Digitization of Savings Groups

In Rwanda, 21% of the adult population use informal mechanism only for their financial transaction. Access to Finance Rwanda (AFR) in partnership with MINECOFIN developed savings group map which plots the number of groups existing in various districts for the period 2010 to 2014. The map shows a total of 28,023 SGs, with an average of 25 members per group and total accumulated savings of FRW 13.8billion and members’ outstanding loans amounting to FRW 11billion. Despite this, Savings Groups still operate a cash based system where member’s savings are kept in boxes. This system has implications for members and the financial sector at large. The members have no automated record of their financial transactions and this reduces the chance to access credit from financial institutions. The informal savings are not accessible by formal financial institutions thus a missed opportunity for investment.

One of the strategies to increase the uptake of DFS by low-income people in rural areas is by reinforcing the digital ecosystem. To that effect, AFR is supporting a SG digitization pilot. The project will entail allowing members of Savings Groups to push money from their mobile wallets to a group wallet and get small loans from the group wallet to individual wallets. This pilot will be spear headed by a local NGO Africa Evangelistic Enterprise (AEE) which will identify SGs to pilot the product. Other partners include Tigo which will provide the network, Furthermore, a joint venture between MVEND and Uplus will create the USDD mobile platform.
In collaboration with our implementing partners, we have set a target to register 200 Saving Groups using mobile technologies with 4,000 women out of 5,000 members liked to mobile money platform in 12 months.

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Saving Groups using mobile technologies
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women out of 5,000 members