FinScope Rwanda 2024 Report: Limited financial services access hinders youth inclusion

The FinScope Rwanda 2024 report reveals significant barriers preventing many Rwandan youth from accessing financial services, primarily due to a lack of youth-oriented options from banks. This gap leaves 6% of Rwandan youth, approximately 200,000 individuals, without access to any financial services, limiting their potential for economic growth and development.

This research, conducted by Access to Finance Rwanda (AFR) in partnership with the Ministry of Finance and Economic Planning (MINECOFIN), the National Bank of Rwanda (BNR), and the National Institute of Statistics of Rwanda (NISR), was presented on October 24, 2024.

Jean Bosco Iyacu, the CEO of AFR, emphasized that a significant factor contributing to the limited access is that banks do not provide adequate services for youth. He stated, "It is possible that the Ministry of Youth and we, as partners, can work together to prepare young people so that when they seek financial services, they can present themselves well and receive services promptly."

The report highlighted that there are 3,616,951 individuals aged between 16 and 30 in Rwanda, representing 44% of the entire adult population, which totals 8,155,637. Since 2020, the youth population has increased by 2%. Among them, those aged 16 to 20 constitute the largest group, accounting for 36%. Notably, 53% of this youth demographic are female, and 68% live in rural areas.

Furthermore, the study indicated that the percentage of youth without access to financial services decreased from 13% (260,000 individuals) in 2020 to 6% (200,000 individuals) in 2024. This data suggests that many young people are unable to access financial services due to their preferences, as they often rely on family or friends when they need money. The report stated that even those who use financial services find it challenging to obtain the funding they desire for their projects, which often feels like a distant dream.

Iyacu remarked, "There are also cases where young people do not have information about services designed for them. Therefore, it is essential to have campaigns to help them understand that there are institutions with programs to assist them, enabling them to build their capacities early as they start their projects."

Currently, AFR has plans to support young entrepreneurs by covering 70% of their project financing through lending institutions, with the entrepreneurs themselves expected to secure the remaining 30%.

Dr. Utumatwishima Jean Nepo Abdallah, the Minister of Youth and Arts development, assured that the Rwandan government is dedicated to ensuring that all youth have access to financial services. He committed to organizing annual meetings where young entrepreneurs would connect with stakeholders from his ministry to discuss existing challenges and explore solutions.

As of now, approximately 7.8 million Rwandans (96%) have access to financial services. The number of youth accessing these services has increased from 1.8 million (87%) in 2020 to 3.4 million (94%) in 2024. The gap in access to financial services between adults and youth has narrowed, decreasing from 8% in 2020 to 3% in 2024, due to the increased use of non-bank financial services.

This FinScope Rwanda 2024 report calls for a concerted effort from financial institutions and the government to foster youth inclusion in financial services, emphasizing its critical role in the economic development of the country.