Digital Financial Services (DFS) and Market infrastructure

Establishment of a Data Dashboard that Tracks the Effects of The Covid-19 Pandemic on the Performance of Digital Financial Services in Rwanda

Background

The COVID-19 pandemic is still sweeping the globe and the number of recorded cases in Africa continues to grow. Not only is this pandemic having an impact on people’s health but the negative social and economic consequences are likely to be more acutely felt in Africa.

Policy responses are being formulated to address economic hardships, such as applying zero fees for mobile money transactions, cutting interest rates or freezing bond payments. However, most policymakers currently lack the real-time data to track the impact of different measures, in order to analyse, respond and adjust as necessary in this ever changing situation. Insight2impact(I2i)/ Centre for Financial Regulation and Inclusion (CENFRI), in partnership with the National Bank of Rwanda (BNR), the Rwandan Utilities Regulatory Authority (RURA) and Access to Finance Rwanda (AFR), intend to address this data gap for Rwanda through the analysis of financial transaction data.

I2i developed a data dashboard that will provide up-to-date results for use by policymakers in reviewing the COVID-19 measures, especially concerning the differential impact on the population by geographic location, gender, age and level of digitisation.

Given the significant changes in mobile money behaviours already identified from the transaction data, a qualitative component was added to this project. This included qualitative interviews with merchants, customers, and agents in order to understand people’s choices, their motivations and what might make these behaviour changes stick, in the long-term as the pandemic evolves.

This project has three main objectives;

  • The first one is to increase the usage of data for policy making. This objective will be achieved when public policy makers request this data, and use it, alongside other available data, to make appropriate decisions on policies and regulations to benefit Rwandans
  • The second objective is the acceleration of digital payments, a primary government policy target and one of the most impactful development shifts that the financial sector can experience over the next decade
  • A key objective of this project is to ensure the on-going tracking of indicators by BNR and RURA beyond the 6-month project period. To achieve this i2i must ensure systematic capacity building of RURA and BNR data analysts

Project results

  • In July, CENFRI conducted 2 qualitative studies (phase 1 and 2) to better understand the impact of Government policies on mobile money behaviours during lockdown. Below are the details of the phases;
  • Qualitative study: Phase 1
    In response to the COVID-19 pandemic, the BNR implemented a policy of zero-rated charges on a number of mobile money transactions, including P2P and merchant payments. The CENFRI team conducted a rapid qualitative research study in July with a total of 50 interviewees across customers, agents and merchants to understand the behaviour changes that the policy change and lockdown catalysed.

    Phase II.
    The second phase of qualitative research took place in September and explored the impact of the reintroduction of mobile money fees as well as ongoing perceptions of mobile money and exploring how persistent the changes in behaviour have been. A similar methodology was followed as in phase 1, as we conducted 50 interviews across customers, agents and merchants.
  • CENFRI concluded the analysis of the COVID-19 tracker to provide deeper insight into how the pandemic had affected Rwandans digital finance behaviour. The CENFRI research team analysed two waves of the COVID-19 tracking survey, created by the insight2impact facility (in partnership with FinMark Trust). The analysis shows that while most Rwandans noted a significant decrease in income in the past year, mobile money users were more likely to rely on savings and less likely to sell assets to cover the income shortfall, which is indicative of the positive impact that access to financial services have on improving resilience to shocks.
  • In November, a research team from CENFRI came to Rwanda for an in-country mission to review the current data capability at the BNR, and get access to the data for further analysis on the agreed financial inclusion indicators. During this time, the research team had a series of engagements with the BNR team, including working with the BNR data science team for 3 weeks (Nov 16 – Dec 2).
  • Through on-site data exploration activities, the team was able to gain a much better understanding of the potential and constraints of the BNR data environment. In particular, they built an “analytical environment” that facilitates the analysis of the data contained in the BNR “production database”, while ensuring anonymity of the data. We believe this “analytical environment” can act as a platform for any future data analytics to be initiated by BNR, this will allow the BNR to make better use of its data assets.
  • The anonymised data required for continuing the Financial Inclusion analysis were transferred to this analytical server which the research team can access from Cape Town South Africa via VPN (Virtual Private Network) in a secure way. CENFRI has now started with the data cleaning process and is on course to complete the remaining analysis within the set timelines.
  • Whilst in Rwanda, the CENFRI team conducted numerous working sessions with the BNR team responsible for the data warehouse to better review the data capabilities of the BNR and identify current constraints. These findings and recommendations are detailed in a report to the BNR, together with our recommendations on possible improvements.
  • In addition, the CENFRI team presented the findings and policy implications from the analysis of the RURA mobile money data to senior policymakers of RURA and the BNR, and led a public session to share the main insights with external stakeholders.

Project overview/Key highlights:

Project name Establishment of a Data Dashboard that Tracks the Effects of The Covid-19 Pandemic on the Performance of Digital Financial Services in Rwanda
Implementing partners National Bank of Rwanda and RURA. CENFRI and 71.4
Project period July 2020 – March 2021
Project objectives
  • The first one is to increase the usage of data for policy making. This objective will be achieved when public policy makers request this data, and use it, alongside other available data, to make appropriate decisions on policies and regulations to benefit Rwandans
  • The second objective is the acceleration of digital payments, a primary government policy target and one of the most impactful development shifts that the financial sector can experience over the next decade
  • A key objective of this project is to ensure the on-going tracking of indicators by BNR and RURA beyond the 6-month project period. To achieve this i2i must ensure systematic capacity building of RURA and BNR data analysts
Project total budget US$ 187,003
Budget disbursed US$ 169,676
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