Date of Publication :5th June 2023

Abstract: The reason for this research is to investigate the importance of financial institutions in expanding financial inclusion in Rwanda, which is considered a vital tool for achieving the country's development and poverty reduction goals. Rwanda has made significant strides in financial inclusion, with a target of achieving 90% formal financial inclusion by 2024. The National Bank of Rwanda (NBR) plays a critical role in the country's financial inclusion strategy, working with other stakeholders to develop and implement policies and plans to advance financial inclusion. The NBR also conducts financial inclusion demand surveys, collects data from financial institutions, and generates periodic reports to evaluate the status of financial inclusion and inform policy decisions. As of the end of 2022, 79% of the population was involved in finance, and 89% had access to financial institutions' services. The study examines three aspects of financial inclusion in Rwanda: access, evolution, and contribution of financial institutions. The results indicate that nearly 89% of the respondents hold accounts with banks, microfinance institutions, or SACCOs, and 67.7% of loan takers borrowed from commercial banks. In 2016, only 26% of Rwandans had commercial bank accounts, but now 89% of the population has accounts in commercial banks (67%) or other financial institutions, including SACCOs (32%). Additionally, the study reveals that 56.9% of respondents have used financial institutions' accounts for less than five years, while 24.1%, 14.9%, and 4% have used them for five to ten years, ten to twenty years, and over twenty years, respectively, indicating an increase in financial literacy and usage in Rwanda over the past two decades. The Rwandan government recognizes the importance of financial inclusion and has implemented several initiatives to promote it. For instance, the government established a national payment system, which has increased the use of electronic payments and improved financial inclusion. These programs have enabled a large number of citizens to participate formally and contribute to the country's economic growth. Rwanda's efforts to promote financial inclusion have received international recognition, with the country being ranked as the second-best performer in Africa in the Global Microscope Index 2021.

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