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

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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. 

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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

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