{{Visa Inc. (NSYE: V) and access to Finance Rwanda (AFR) has announced results of a first-of-its-kind study of the financial behavior of Rwandans.}}
The study highlights how financial service providers can design better products and bring more Rwandans into the financial system.
The study, titled Portifolios of Rwanda, draws on detailed financial diaries tracking income and expenses of 59 Rwandan families, rendering snapshots of each family’s financial portfolio.
The study was designed and conducted by Bankable Frontier Associates and Ntare Insights, Led by Daryl Collins, co-author of the seminar work portifolios of the floor.
The portifolio study revealed; Underserved Rwandans are surprisingly active money changers.
On average, they use six financial instruments and cycle more than 100% of their income through them in frequent small-scale transactions.
The underserved primarily use informal instruments. When banks, savings and credit cooperative organizations SACCOs, microfinance Institutions MFIs and telcos reach out to underserved.
Their primary competition may not be each other but the mattress where the consumers secrete away cash or shopkeepers from whom they borrow to buy household necessities.
Understanding these informal instruments can point formal financial providers towards opportunities to become more relevant in the lives of consumers.
The Portifolios of Rwanda report highlights five opportunities ranging from small-ticket credit offering better privacy than borrowing from family and friends to saving vehicles that mimic the best features of livestock while solving for limitations and mitigating risk.
According to Finscope Rwanda 2012, a nationwide survey on financial inclusion sponsored by AFR, 79% of Rwandan adults are financially ‘underserved’.
For example, they may only use informal financial instruments such as saving in cash at home or taking credit from the local shopkeeper, or mobile money service.
Portifolios of Rwanda expands upon the Finscope study by taking a more in-depth look at the opportunities to actively bank the underserved.
“Finscope showed how far Rwanda has come in extending access to financial services, but also showed there’s more to be done.
Portifolios of Rwanda goes the next step to show where opportunities lay for financial service providers, policy makers and other stakeholders,” says Eric Rwigamba the Acting Technical Director of AFR.
Mark Pickens, Director of Emerging Market Solutions at Visa, said , “Portifolios of Rwanda” can help financial service providers uncover new revenue opportunities and push the frontier of financial inclusion.
By using the findings to understand why so many Rwandans prefer informal instruments, they can design products that solve for unment needs”.
The study was commissioned by Visa as part of the company’s contribution to the Charter of Collaboration with the Government of Rwanda.
The Charter, signed in December 2011, aims at jointly developing localized solutions.
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