Completed Research

Increasing Meaningful Financial Inclusion in Rwanda: Community-Based Savings and Credit Co-operative Societies

University of Toronto

In 2008, only 21% of Rwanda’s population had regular access to a formal financial institution, making financial exclusion a major problem in the country. Launched in 2008, the government of Rwanda started the Umurenge Saving and Credit Co-operative Societies (SACCOs) to improve financial inclusion in the country. SACCOs are community member-owned, non-profit financial institutions. Since the implementation of SACCOs, financial inclusion in Rwanda has increased to 89% in 2020. This case study will investigate SACCOs and the digitization of financial inclusion in rural Rwanda. 

Hard to Reach

Rwandans facing geographical barriers, lack of financial literacy, and socioeconomic circumstances preventing them from effectively accessing and utilizing financial services offered by commercial banks or micro-finance institutions.

Key Takeaways

There is an array of factors that have allowed saving and credit co-operative societies (SACCOs) to succeed in Rwanda, each
contributing a unique piece to the larger puzzle. These include:

  • Geography and Infrastructure. Rwanda is one of the geographically smallest countries in Africa — a critical factor that allowed the government to establish a SACCO in each administrative sector.
  • Culture and Community. SACCOs embody a unique approach to financial services and community members actively participate in decision-making processes.
  • Government. The government’s role is another context-specific layer to SACCOs’ success. A crucial part of the reconstruction was an ambitious economic plan to transform Rwanda into a middle-income country by promoting entrepreneurship, investment, and inclusive economic growth. SACCOs emerged as part of this agenda to address all three pillars and include people who were previously unbanked.
  • COVID-19 and Mobile Money. During the pandemic, there was a significant push for digital financial services in the country with an increased interest from SACCOs, commercial banks, and other financial institutions in digital financial services in response to the pandemic