Financial inclusion for Rwandan youth rose from 88% in 2020 to 94% in 2024, as reported in the Finscope 2024 Youth Financial Inclusion Thematic Report by Access to Finance Rwanda (AFR).
The findings were shared on October 24, 2024, during the Young CEOs’ Brunch in Kigali, which gathered young entrepreneurs and key stakeholders from the financial sector, including service providers, fintech companies, and policymakers.
The report highlights a substantial decrease in the financial exclusion rate among young Rwandans, dropping from 13% (260,000 individuals) in 2020 to 6% (200,000) in 2024. Notably, secondary students and unemployed youth face a higher exclusion rate of 14%, while those with formal employment achieve 100% financial inclusion.
Gender disparities are narrowing, with 95% of young men and 94% of young women now financially included, reflecting only a 1% difference. The gap between rural and urban youth has also significantly diminished, from 10% in 2020 to 1% in 2024, with 94% of rural and 95% of urban youth included.
Despite this progress, young entrepreneurs still encounter challenges that limit their economic contributions, such as difficulty accessing financial services, limited collateral options, and a lack of tailored financial products. Financial literacy, market connections, and a supportive environment remain critical needs.
Jean-Bosco Iyacu, CEO of AFR, emphasized the importance of listening to young people’s needs and investigating the root causes of their challenges to inform effective policy and financial solutions. He noted that 18% of youth, particularly those aged 25 to 30, are banked, while others rely on non-bank institutions for financial services.
Mobile money, Umurenge SACCOs, and insurance are significant contributors to formal financial inclusion, with 75% of youth possessing mobile money accounts and 81% reporting savings in the past year. However, barriers to credit access persist, with many citing a lack of collateral or not meeting requirements.
AFR is collaborating with financial institutions to provide portfolio guarantees of up to 70% for youth-led small enterprises needing loans. Iyacu stressed the necessity of building youth capacity to gain bank trust and improve access to financial services.
The report recommends collecting disaggregated data to help regulators track financial inclusion progress by gender and age. It advocates for enhanced financial education, vocational training, and mentorship programs. The banking sector is encouraged to create tailored financial products that meet youth needs.
Various stakeholders, including Vincent Munyeshyaka from the Business Development Fund (BDF) and Grace Ishimwe from IG Wear Rwandan Ltd, highlighted the importance of partnerships and diversification of support for young entrepreneurs. The need for skilled bank staff to better assess youth projects was also emphasized.
The Minister of Youth and Arts, Abdallah Utumatwishima, suggested holding annual meetings to address these challenges and promote financial awareness among youth through a one-stop service center.