Ross Nathan, former CEO of VisionFund Rwanda shares about a recently launched mobile-banking platform that aims to increase access to cashless payments for low income earners
The creation of a cashless economy is a significant aspect of Rwanda’s Vision 2020 strategy and the government is in the process of and is investing considerably in making all its financial transactions possible electronically or via mobile phones.
Extending this vision and financial inclusion to rural Rwanda requires the support of all entities working in the development sector; from setting up the infrastructure to helping communities adapt to it. VisionFund Rwanda (VFR) currently serves over 13,000 borrowers and 25,000 micro savers across the country – 82% of whom reside in rural areas with limited access to banks and other financial services. Serving these individuals is costly in terms of time and money –transportation costs to reach them are high for the organisation and mean extra costs for clients.
Research confirms a ready market for mobile-banking:
VisionFund conducted a study amongst 293 Savings Groups members (66% of them female) in four selected areas in the Northern, Eastern and Southern Provinces, with the following results:
- 97% of group members have access to mobile phones
- 84% of group members still have classic mobile phones, and only 13% have smart phones
- 77% believe that a mobile solution will bring security in loan transactions, add convenience and will shorten reach to loan and saving services
- Analysis of mobile agents in surveyed areas showed presence of 20,140 agents from Mobile Network Operators and financial institutions
The study confirmed a market that was conducive to introducing digital transactions – a step that would mutually benefit the communities as well as the organisation.
Introducing M-Hano Agent
In July 2018, VisionFund Rwanda launched a mobile-banking platform called M-Hano Agent which aims to increase access to cashless payments for low income earners, especially in rural areas, at affordable prices. The platform does not require an application and can be accessed with any mobile phone by dialling a code.
The service enables VisionFund’s clients to access banking services with VFR including access to account information, making payments, money transfer, mobile money services, paying for utility bills, and make cash deposits/repayments or cash withdrawals through agents.
The agent network affords clients the convenience of easy-access, increased service hours and the comfort of transacting at familiar outlets as opposed to the somewhat intimidating banks. The network also allows VFR to extend its services even further without the time and cost barriers of creating physical branches and the necessary staff to run them.
The service also creates new job opportunities for communities. At the launch of service at VFR’s headquarters in Muhima, Kigali, selected agents were provided with kits and phones to be used for daily transactions, for which they will receive commission payments. As liquidity has been a major challenge to effectively running a successful mobile agent network, VFR is developing an emergency cash credit loan product to help mobile agents manage their liquidity.
L-R: Aimable Nkuranga, the Executive Director of the Association of Microfinance Institutions in Rwanda (AMIR), Ross Nathan, CEO of VisionFund Rwanda, Niyibizi Daniel (an agent from the Nyamata area of the eastern province), World Vision Rwanda’s National Director Sean Kerrigan, and VisionFund staff members Witness Muhongerwa and Bosco Kagabo at the launch of M-Hano.