Rwanda is currently experiencing one of its fastest growth periods coupled with improving socio-economic progress and considerable improvements in financial inclusion, which increased from 48% in 2008 to 72% in 2012. The rise in access is mostly attributable to an increase in the proportion of adults who are formally served through banks and non-bank formal products. Village Savings and Loan Groups (VSLGs) usually serve the extremely poor that are not traditionally reached by formal means. VSLGs are often viewed as a means to not only provide access for the poorest households to valuable financial services, but to provide a pathway for formal financial inclusion. The Promoting Opportunities for Women’s Economic Empowerment in Rural Africa (POWER Africa) initiative, funded by the MasterCard Foundation, aims to improve financial inclusion in Burundi, Côte d’Ivoire, Ethiopia and Rwanda by linking VSLGs with formal financial institutions. Promoting opportunities for Financial Inclusion in Rwanda (PROFIR), as the project is called in Rwanda, aims to facilitate the access of 180,000 people to formal financial services through linkages to various financial services provider (FSPs), including Saving and Credit Cooperatives (SACCOs), Microfinance institutions, mobile network operators (MNOs) and Banks with mobile technology and agency banking, as well as provide financial literacy training to groups. The purpose of forming these linkages is to provide groups, and thus group members, access to larger loan amounts and increased security for their savings. Coupled with this increase in access is an improvement in members’ financial literacy and ability to make better-informed financial decisions through the upfront financial literacy training. As a result of this, male and female members are better able to smooth their consumption and invest in household assets, income-generating activities, and health and education expenses. These factors assist in reducing poverty levels, improving food security and empowering women (thus reducing the gap in household decision making between men and women). In order to understand the household benefits that can be attributed to the PROFIR project, CARE has commissioned Genesis Analytics, in partnership with RWI Essen and ikapadata, to design and implement an impact evaluation of PROFIR.
Peters, J., A. Schoofs, M. Sievert (2016) Preferences over Bank and Family Loans in Rural Rwanda. Journal of International Development 28 (4): 623-630.
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