access to finance rwanda 2017 · project 2: automation of non-umurenge saccos and mfis through...

ACCESS TO FINANCE RWANDA

2017ANNUAL REPORT

SUMMARY

ANNUAL REPORT 2017 SUMMARY

Foreword

On behalf of the Access to Finance (AFR) team, I am pleased to present to you the 2017 Annual Report. In its second phase of operations, 2016-2020, AFR has partnered with DFID, MasterCard Foundation, Sweden and USAID with grants amounting to USD 31,643,208 to intervene in five Key Result Areas: SACCOs and Savings Group Development, Agriculture and Rural Finance, Digital Financial Services, Risk Mitigation and Market Development. A separate fund of Euro 3 million by KfW was managed under AFR by the Frankfurt School for the period April 2014 to November 2017. We continue to work closely with the Government of Rwanda (GOR) in aligning our strategy to the country’s broader development agenda.

During this year, AFR transitioned into a new governance structure with the necessary organs and documentation in place. Key strategic partnerships were negotiated leading to Memorandum of Understanding (MOUs) with: Rwanda Cooperative Agency (RCA) for the automation of the Umurenge SACCO’s, MINECOFIN for the design and implementation of the Long Term Savings Scheme, Local Administrative Development Agency (LODA) for the digitisation of social cash transfers and MINAGRI for the implementation of the National Agriculture Insurance Scheme.

We embarked on development of eleven projects in addition to four approved in 2016. Currently the projects are in different implementation phases. By December 2017, AFR cumulatively reached 53,626 people of whom 36% were women. In addition 1,324 staff of financial institutions were trained. AFR supported development of new financial products to improve usage of financial services by low income people. These include; four agriculture finance products, two digital finance products and three micro insurance products.

The report highlights the achievements and successes we experienced over the year. It also includes the stories of clients such as Claudine and Consolee whose lives have been impacted by a financial service, packaged appropriately and delivered on time. The work reported here would not have been possible without the support of those who have selflessly given time, resources and technical expertise to achieve our vision.

AFR remains solid in its commitment to an inclusive financial sector that meets the needs of low-income rural populations in Rwanda.

Thank you for your partnership in 2017.

Waringa KibeCountry Director

2017 HIGHLIGHTS

3,435,626USD

Value of agriculture loans disbursed by AFR supported

institutions

Development of SACCOs and Savings Groups

NEW SACCO AND MFI ACCOUNTS OPENED

3,672 2,2031,469

Agriculture Finance

Digital financial Services

4 NEW FINANCIAL PRODUCTS DEVELOPED, PILOTED AND ROLLED OUT

2between financial institutions, suppliers,

buyers and other value chain actors

NEW PRIVATE SECTOR PARTNERSHIPS

2 NEW DIGITAL PRODUCTS PILOTED

Risk Mitigation

Outcome

3 inclusive insurance products developed or

improved with AFR support

smallholder farmers use financial services

27,931 11,58016,351

People with active SACCO and MFI accounts

1,811 1,086725

PEOPLE USE INCLUSIVE INSURANCE PRODUCTS

20,502 14,9675,535

PEOPLE USE DIGITAL FINANCIAL SERVICES

1,521 607914

KNOWLEDGE PRODUCTS produced and disseminated to close knowledge gaps, inform policy making and influence

financial sector

10

SACCO and MFI staff received training on new systems, procedures and consumer protection

333 SACCO AND MFI STAFF TRAINED

4 MOUs WERE SIGNED with Rwanda Cooperative Agency

(RCA) MINECOFIN, Local Administrative Development Agency (LODA), and

MINAGRI respectively.

3 PARTNERS ENGAGED IN LTSS

Project 1: Umurenge SACCO AutomationAccess to Finance Investment Committee (AFRIC) approved continued support to the Government of Rwanda through the Rwanda Cooperative Agency (RCA) to automate the 416 Umurenge SACCOs. The initiative is aimed at supporting the SACCOs to manage their growth, and increase their ability to operate efficiently and effectively so that the SACCO may be consolidated to form the Cooperative Bank.

Project 2: Automation of Non-Umurenge SACCOs and MFIsThrough shared revenue arrangements the Association of Microfinance Institutions in Rwanda (AMIR) is working with its member institutions both SACCO’s and MFI’s to implement a shared core banking system. Partners on the project include the Savings Bank Foundation for International Cooperation (SBFIC) who are supporting data clean up.

As part of the expansion of the work done in Phase I in automating tea payments with Mulindi and Shagasha tea factories, an additional five tea SACCO’s were selected and support will continue to be provided into 2018.

Customisation of the core banking system

SACCO and MFI staff were trained in the new system

Institutional assessment Projects risk assessment by PWC


Key Focus Area 1 •

However, the SACCOs face managerial and operational challenges that threaten their ability to evolve into professional and sustainable financial institutions that are able to serve their members effectively and grow their customer base.

AFR supports the provision of technical and financial assistance to SACCOs to develop their management systems, automate their operations, and develop and improve the SACCOs’ financial services and products. AFR’s support will enable the SACCOs to meet the needs of financially under-served people particularly in rural areas.

Through AFR and other stakeholder partnerships and support, it is expected that SACCOs will improve their operational management to effectively and efficiently manage their transactions, generate reliable reports for both management and regulatory authorities, and increase their customer base resulting in increased financial inclusion and the usage of financial services & products.

The Savings and Credit Cooperations (SACCOs) have considerably contributed to the increase in financial inclusion in Rwanda.

Source: FinScope 2016

42%in 2008

72%in 2012

89%in 2016

Activities in 2017:

“Being a member of a VSLA has enabled me to create economic

security. I have suffered from severe pain since I was three years old,

it can be intolerable and when it is worst, I cannot work for weeks –

sometimes even for months - which makes it hard to plan ahead and

develop a profitable livelihood.

The VSLA is like a safety net, we trust each other and you know that the

other members will support you in case of an emergency. In addition, I have

learned how to improve my yield by using better farming techniques, which

has also greatly contributed to increase my earnings. When I joined the

group, I could only afford to put aside RWF 200 but now I can easily save

RWF 800 in a week.”Niyonagize Claudine

The PROFIFA project works with 446 people living with disabilities (65% women). Family members are engaged to support them in the areas where they are challenged.

Through the POFIFA project, AFR is building on its partnership in Phase I with CARE Rwanda to support linkages to formal financial institutions for mature savings groups engaged in agriculture. Through CARE’s partnership with DUHAMIC ADRI, the project offers an opportunity to improve agriculture production, financial education and business skills for 120,000 smallholder farmers. The focus of the project is to increase access and use of appropriate financial products. Selected financial services providers are supported to develop financial

products that meet the needs of the savings group members. It is expected that, by the end of the intervention financial institutions will have acquired knowledge in developing and providing financial products to low-income people organised in savings groups.

The project aims at demonstrating that savings groups are a viable channel for improving agricultural production and providing linkage to the formal financial sector.

AFR has partnered with FSDA, UNHCR and MIDIMAR in looking at ways to address the provision of financial services to refugees in Rwanda. The project is designed to leverage the skills and the innovation of the private sector to develop market-led, sustainable financial services for forcibly displaced populations. Some of the activities carried out in the year include:

Project 3: Promoting Financial Inclusion for Smallholder Farmers Organised into VSLAs

Refugee Finance project

Innovation Competition for Financial Services targeting Refugees in Rwanda

Financial service providers were taken into a refugee community to participate in a Product Design Sprint in December 2017. Four concepts from the sprint will each receive seed capital to test the product, service or solution, build in technical expertise and strengthen the business case, which is subject for approval by the FSD Africa Investment Committee.

Study on the financial lives of forcibly displaced people.

AFR in partnership with FSD Africa commissioned a study on “Refugees and their money in refugee camps in Rwanda” in July 2017. The report provides market intelligence to build a sound business case for financial institutions to profitably serve the FDP population; and aims, to better understand the financial needs of the FDP population in Rwanda to enable financial service providers to effectively target the segment.

Achievements in 2017

Baseline Survey

Financial Needs Assessment

farmers have been organised into value chain based farmer clusters

76,741 23%77%

Supply side:

• Majority of the financial institutions interviewed (11) are interested in working with savings groups on linkage products.

• Some of the financial institutions have infrastructure (agent banking services, mobile banking platform) that can facilitate linkage of the informal to the formal financial sector.

• Some financial institutions have started to develop agriculture finance products, however some adjustments are needed to enable them meet the needs of the saving group members.

• Overall, there is a willingness by the financial institutions to meet the needs of smallholder farmers and if supported well, would result in needs being met.

Demand side:

• Farmers have very small land holdings, thus loan requests are small typically under RWF 500,000.• Farmers have high need for credit during the sowing season and during harvest• Loan requirements vary depending on the scale of activity, landholding, number livestock • For livestock, most farmers need small loans for purchase and upkeep of animals. The loans

would be short-term, up to 6 months for most small livestock farmers.

Agriculture FinanceKey Focus Area 2 •

Project 1: Establishment of Agriculture Finance Units AFR has supported Unguka Bank (UB), a Micro Finance Bank , and Umutanguha Finance Company Ltd (UFC), a Microfinance institution, to develop and strengthen their institutional capacity to effectively finance the agriculture sector.


Institutional diagnosisAFR contracted Friends Consult ltd to provide technical assistance in setting up agriculture finance units within the two institutions to strengthen the internal capacity. The units will enable them to efficiently manage their agricultural credit portfolio through delivery of low risk- and demand responsive financial services to their clients engaging in agricultural value chain activities. The main findings from the institutional diagnoses were:

Lack of technical staff

Inappropriate and unclear lending procedures

Inadequate Managements Information System

Constrained mobility of credit officers

Staff capacity building on agriculture lending In total, 191 (63 women) staff were trained on (Agriculture lending methodologies and new agriculture loan products.

Develop and refine agriculture loan products

Support access and usage of value chain finance by small-holder farmers engaged in maize, coffee, tea, dairy and Irish potato farming.

AFR promotes increased access and uptake of financial services in order to sustainably increase on-farm productivity and subsequently improve people’s incomes and livelihoods. AFR has supported various innovations/projects in Phase I that enhanced small-holder farmer financing. The key lessons learnt from these projects will inform the development and implementation of projects in Phase II.

33%of the GDP comes from agriculture

90%of the national

food need is covered by agriculture

50%of the export revenues are

generated from agriculture

69%of the labour

force are employed in agriculture

Source: EICV4

In Rwanda:

Farm production loan

Agricultural inputs loan Agri-Asset loan

Post harvest loan

Number of agriculture clients

with loans

Volume of loans to agriculture (USD)

UFC • 1,788,331UB • 1,785,719

UFC 27%

UFC 1.8%

UB 7.3%

UB 7%

new products developed (in each of the institutions)

% portfolio to agriculture

Portfolio at risk

44,134 • 3,789

1,775 • 1,677

UCF

UB

The Dairy Value Chain Financing Project was officially launched in 2017. See page 7 for more information.

In 2017, a grant agreement between AFR and Heifer international was signed to implement a project that will

promote financing within the dairy value chain through technological innovations and outreach.

Project 3: Increasing Working Capital Lending through Innovative Technology and Access to Finance for the Coffee Sector

Project 2: Dairy Value Chain Financing


Farmer mobilisation and awareness

meetings

Stakeholders include the Ministry of Agriculture and Animal resources

(MINAGRI), Rwanda Agriculture Board (RAB) and the Rwanda Cooperative

Agency (RCA).

Recruitment of the technology service provider. Virtual City has signed a contract with Heifer International Rwanda

The project was officially launched in the fourth

quarter of 2017

Heifer finalized recruitment of key

staff members.

Procurement of the devices to be used for

integration

The project focuses on improving the market for working capital financing for the washed coffee subsector with the creation and continued development of the SMS Bookkeeping and coffeetransparent.com platform. The platform was originally developed to meet the Coffee Washing Stations (CWS) seasonal need for a significant amount of working capital to operate, but they were not able to receive adequate working capital financing from financial institutions or coffee

exporters. Without transparency in to the operational and financial progress of the CWSs throughout the harvest season, potential working capital lenders were not able to absorb the financial risk of lending. As a result, the CWSs were not able to operate and purchase high value coffee cherry from the smallholder farmers. The SMS bookkeeping system, combined with the online web portal coffeetransparency.com, allows working capital lenders to mitigate their risks.


data collected from CWS for the platform

Volume of cherry processed Volume of working capital (USD) smallholder farmers access credit

Scaling SMS Bookkeeping Platform Rollout:

Three new financial institutions who have not previously used the SMS Bookkeeping Platform - BPR, Bank of Kigali (BK), and Urwego Opportunity Bank – have expressed their interest to partner with Technoserve during the 2018 season

SMS Bookkeeping Platform Expansion – Capturing green coffee sales information:

Coffee washing station leaders and accountants received half-day training helping TechnoServe to refine training materials in advance of its full-scale rollout during 2018.

Post harvest loan

8 5,572 1,192,797 16,555

Digital Financial ServicesKey Focus Area 3 •

Digital Financial Services (DFS) has been identified as a major contributor to increasing the uptake and use of financial services in Rwanda. It is also in line with government objective of moving into a cash-lite economy.

AFR:

Supports the design and delivery of innovate DFS products and services.

Facilitates and promotes the uptake of digital finance services.

Facilitates cooperation between Mobile Network Operators (MNOs) and banks

Provides institutional support to Rwanda’s financial sector associations;

Analyses the habits and needs of low-income consumers.

In 2016, AFR embarked on a series of activities to support the development of DFS in Rwanda at the national, sector and institutional levels which included policy research, support of financial service providers and steering innovative ideas.

Innovative Fund to Support Digital Financial Solutions

Project 1: Digitisation of Savings Groups The pilot project enables members of 100 savings groups to transfer money from their mobile wallets to a group wallet and get small loans from the group wallet to individual wallets. The project is spear headed by AEE and partners with Tigo, MTN, MVEND and Uplus.


‘GWIZA’ (meaning multiply in Kinyarwanda), a savings group app was developed, tested and deployed by MVEND ltd. The app is a USSD e-wallet that enables members to transfer money from their mobile wallets to the group wallet.

A MoU was signed between AEE, MTN, AFR and MVEND-

Uplus.

GWIZA is now integrated with both MTN and Tigo. Integration with Airtel will be done in 2018.

A Village Agent communications manual

was developed.

AEE agreed to procure 2,000 mobile phones from MTN at an

affordable price of 7,000 RWF (USD 8). The phones will be sold

on a six-months payment plan to savings group members.

Gwiza was successfully deployed to a savings

group in Bugesera.

new clients have registered for DFS.

new DFS product piloted with AFR

support

1

21

Project 2: Digitisation of Government Social Cash Transfers AFR have obtained approval for the digitisation of the social cash transfers project in partnership with the Rwanda Local Administrative Entities Development Agency (LODA), an agency under the Ministry of Local Administration (MINALOC) in charge of social protection.

Achievements of the project for 2017

• A comprehensive study was carried out that involved interviewing LODA staff, field visits to interview beneficiaries, mapping the payment process and evaluating existing technologies.

• An MoU between AFR and LODA was signed.• The procurement process for the identification of an

implementing partner was initiated.

Mobile phone applications is one of the most effective tools for promotion of inclusive finance.

AFR collaborates with TransUnion (TU) to support the roll out of credit scoring tools to financial institutions. This involves training of the staff on how to use the tools to determine the credit worthiness of clients. AFR also supports TU in sensitising the public on how to use Menyesha, a phone application, to

track their credit worthiness and loan repayment via their mobile phone, thus ensuring that they honor their financial commitments. Menyesha can be used by anyone intending to access credit from a financial institution or for those who currently have a loan, to be aware of their CRB credit rating.

Development of a Digital Financial Services strategyAFR contracted Bankable Frontiers Associates (BFA) to develop a four year DFS strategy in February 2017. The strategy was later approved by AFRIC.

Priority areas of the DFS Strategy

Support for the interoperability agenda. AFR will also support government departments to join the interoperable infrastructure for G2P and P2G payments.

Digitisation of financial services already used by low-income customers

Innovation in the private sector

Customer trust and familiarity. AFR will work with the regulator to develop and expand customer protection regulation, as well as running outreach campaigns (along with providers) to enhance customer trust.

Project 3: Support to the Credit Reference Bureau

800U-SACCO AND MFI CREDIT OFFICERS

were trained in how to use credit scoring tools to evaluate loan applications. The 10 days training was carried out nationwide in June 2017 targeting credit

officers from U-SACCOS and MFIs.

570230

in credit score and credit scorecard training

TRAINING COURSE FOR MFI CREDIT ANALYSTS

2 DAYS Menyesha, a credit status mobile phone app was successfully developed and UATs were completed.

Menyesha was officially

launched and

TransUnion embarked on a nationwide

awareness campaign to promote the

app.

MENYESHA


Menyesha has been integrated with MTN mobile money. 1,500 new clients have

registered for DFS.new DFS product piloted with AFR support 1

A project to support deployment of an high quality, effective, structured, shared agency banking network across the country

was approved. The project will start with three institutions; KCB Bank Rwanda Ltd, Cogebanque, Umwalimu SACCO.

Agency Banking Intervention Support

BNR SUPPORTAFR provides ongoing support to BNR. AFR contracted a consultant to conduct training on ISO 12812 and provide advisory services on the appropriate standards adaptation for Rwanda mobile financial services market. Johan Bezuidenhoudt, Managing Director of Leonine Initiatives, carried out a two-day training workshop for BNR staff on the ISO 12812 standards and regulations.

A consultant, Professor Maria Chiara Malaguti was contracted to offer technical assistance for the development of regulations governing payment service providers, payment gateways and aggregators in Rwanda. In collaboration with the Head of Payments at the Central Bank, the consultant drafted two directives that will be the basis of regulations implemented by BNR.

Promotion of Risk Mitigation Approaches - Inclusive Insurance Market Development and Long Term Saving Scheme


Key Focus Area 4.1

Establishment of the Rwanda Long Term Savings Scheme (LTSS)/ Informal Sector Pension Scheme

The current Rwanda Social Security Board (RSSB) pension products covers only about 6% the people working in the formal economy. However, it is estimated that around 70% of the working population in Africa work in the informal sector. In June 2016, the AFR Investment Committee approved funding (USD 3,547,200) to support the Government of Rwanda to establish an informal sector pension scheme that will provide an alternative old age saving plan for the vast majority of the population working in the informal sector.

Key Focus Area 4.2

Inclusive Insurance Market Development

According to the FinScope Survey 2016, only 8.5% of Rwandan adults have insurance and the uptake of insurance in Rwanda is skewed towards medical insurance mainly consumed by the salaried or formally employed.

AFR supports the development of an inclusive insurance intervention framework.

As part of its 2016-2020 strategic plan, AFR seeks to improve the welfare of low-income people as well as SMEs through improved access and usage of better risk management solutions including insurance and savings.

Project 1: Enabling Digital Insurance Take-offAFR supported Inclusivity solutions (an insurance innovation company from South Africa), Radiant Insurance Company Ltd and Tigo Rwanda Ltd to design hospital cash and life insurance products that leverage mobile channels to reach the unserved population. The product combines both loyalty and upsell (paid) products to make the model commercially sustainable. The project also explored bundling opportunities with other financial and non-financial services to deliver increased value to consumers and help drive uptake.


Establishment of the project

team.

Deployment of IT platforms and

tools.Soft launch of the “Ingoboka cash” (hospital cash)

insurance on the 14th September

2017.

loyalty insurance policies as at 31st December.

Training of Tigo’s call centre staff on the insurance products.

Training of 42 Tigo service agents who will handle the claims and promote the insurance from late January 2018.

upsell (paid) policies active as of 31st December.

140 18122Individual

Family

32,502

20,502

customers have registered on the product platform.

21920,000insurance

claims paid

at a total value of RWF

of the claims are paid in less than 3 days.

“Surgery can easily cost you more than a month's income but the Ingoboka Cash Insurance made it possible for us to pay the medical bills and cover the loss of income during the hospitalisation.

Even though we have Mutuelle de Sante we still have to pay 10% of the medical bills and I was a worried that the cost of my cesarean section would exceed our budget. My husband and I earn about RWF 50,000 (USD 58) so we have a very tight budget.

Luckily, my husband remembered about the Ingoboka Cash Insurance that we had signed up for after receiving a promotional text from Tigo. At first, we did not understand it, we thought it was some kind of competition but after reading it carefully we had agreed to sign up. My husband went to the local Tigo branch and with their guidance, we filed the insurance claim. Shortly after, I received RWF 140,000 in Tigo Cash. I was speechless, the large amount enabled us to pay for the surgery, to buy good quality food for the baby and even to pay school fees for my oldest daughter. We have shared the experience with our family and friends and many of them have also signed up for Ingoboka Cash.”

YANKURIJE Consolée - insurance holder

77%

AFR in collaboration with the Ministry of Finance and Economic Planning (MINECOFIN) initiated a project to support the establishment of a Long term saving scheme that will provide every Rwandan citizen (including self-employed non-

salaried workers as well as public and private sector salaried employees) an equal right and opportunity to achieve a financially secure and dignified retirement.

During the year, AFR in collaboration with the Ministry of Agriculture and Animal resources (MINAGRI) carried out a feasibility study for a National Crop and Livestock Insurance Scheme. Key findings were:

Project 2: Promoting National Agriculture Insurance Scheme

• There is a business case for both crop and livestock insurance products• Livestock insurance should immediately be piloted to inform national rollout • There are challenges with yield data to inform adequate design of crop insurance product

During the last quarter of 2017, the AFR Investment Committee and the Board of Directors approved a pilot project to support livestock insurance in partnership local insurers and international reinsurers.

Development of life tablesLife tables (also known as mortality tables) have been produced. The tables will be used for pricing and estimating reserves by life assurance companies as well as by pension funds in order to manage their liabilities. Feedback received from the market players indicates that the tables are being used and BNR has expressed the need for a follow up support to enforce wide usage of the life tables and continued data collection from life insurers to inform future tables’ updates.

Development of Rwanda Micro-insurance RegulationAFR, in collaboration with BNR, have recruited CENFRI, a South African think tank to support in the design of Rwanda Specific Microinsurance Regulations by engaging the private sector and other key stakeholders.

Project 3: Establishment of the Rwanda Long Term Saving Scheme (LTSS)


Acquisition of office and IT equipment

Development of LTSS application modules

Deployment of web application on server

VPN connection established with Cogebank

Integration of NIDA and LODA

Establishment of National Project Management Unit and recruitment of 13 staff and nine international consultants

Design, translation and field testing of Information, Education and Communication (IEC) tools

Development of investment, awareness and field promotion, and client protection

and compliance monitoring strategy

Establishment of steering committee and first meeting conducted

Supply mapping and demand side research conducted

LTSS law enacted§

stakeholder workshops

2

Market Development and Facilitation


AFR supports research and advocacy in order to increase knowledge and understanding of rural finance needs, regulatory and market barriers and drivers that will spur usage and uptake of financial services in Rwanda. AFR uses the Making Markets Work for the Poor approach (M4P).

This section highlights key developments in Rwanda’s financial sector, which AFR monitors to ensure that its programmes are aligned to the needs of the sector.

Market facilitation for a vibrant, coordinated and inclusive financial sector

Consultancy for developing a strategy for deepening outreach to Women in RwandaAFR financed Women World Banking to conduct a study and develop a strategy that will increase opportunities for women to participate in and stimulate economic growth via access to finance in Rwanda. The research team found that banks tend to offer products that meet single use cases, rather than address a client’s financial needs holistically. To access financial services, clients must first visit a branch, where staff offer them whichever product they are assigned to promote, but rarely provide additional information about other services that might be of interest. Since women clients are less likely to feel comfortable approaching the bank and asking questions, they have limited awareness of different bank products and services or how they could benefit.

A key recommendation is that whereas there are multiple banks, mobile network operators, and other financial institutions in Rwanda with promising women-focused initiatives, none has yet emerged as a clear leader in effectively serving women clients. Rwandan banks can leverage their existing institutional capacity and the country’s conducive regulatory environment to reach Rwanda’s 2.6 million unbanked women, benefiting the banks’ bottom lines as well as women clients, their families, and communities. As a way forward, AFR will partner with financial institutions to develop tailor made products for women.

Human Centered Design Research Training on Mobile Insurance AFR supported Inclusivity Solutions to conduct a Human Centered Design (HCD) market research on mobile insurance in Rwanda as part of its engagement with Tigo Rwanda. The research aimed at gaining an in depth understanding of the lives, risks, needs and wants of potential low-income insurance clients in Rwanda. Three focus group discussions were conducted in Huye, Rubavu and Kigali involving a sample of 21 respondents aged between 25 and 50 years old.

Focus group topics included fears and concerns, coping mechanisms, experience with and understanding of other insurance products, mobile behavior, and savings and loan behaviors. The participants demonstrated a basis knowledge of insurance and high interest in insurance products that could meet their needs:

• Top three priorities are health, family and housing.• People are interested in products to help protect them

beyond Mutuelle de Sante (national health insurance).• Significant desire for information and services to

improve their lives.

Throughout the year, AFR has supported a number of market development and facilitation events. The photo below is from the microinsurance conference hosted by AFR and held in Kigali in August 2017. See page 14 for more information about the conference.

Financial Service Providers Data Maturity SurveyAFR in conjunction with insight2impact (i2i) and FSD Africa conducted a survey to understand the level of data use for decision making among Financial Service Providers (FSPs). The study aimed to map the use of data by FSPs to gain insights on how to build an information driven financial market that supports sustainable financial inclusion. Similar studies were commissioned among FSPs in Kenya, Tanzania, Uganda, Mozambique, Ghana, and Zambia. In Rwanda, 117 FSPs, mainly SACCOs, were surveyed. Some of the key findings were:

Based on focus group learnings, five products were tested: Hospital Cash, Family Protection (Life), House, Prescription, and Cancer insurance with the following results:

• Highest demand was for Hospital Cash and Family Protection• High potential for house insurance, but will require additional testing & planning• Prescription and cancer insurance were of interest, but did not resonate as stand-alone products• Strong preference for Value Added Services bundled with insurance to provide immediate tangible benefits (e.g.

tele-doctor, SMS information, pharmacy vouchers

Technical assistance to review the licensing policy for financial institutions with BNRIn February 2017, AFRIC approved a proposal to provide technical assistance to BNR in reviewing the licensing policy for financial institutions in Rwanda. The overarching objective of the study is to assist the bank in strengthening financial stability, by putting in place guidance for the licensing of financial institutions.

In May 2017, AFR contracted with MAXWELL Stamp PLC to conduct the assignment. The final documents are expected by the end of January 2018.

Development of the National Financial Inclusion StrategyAFR supported the National Bank of Rwanda to develop a National Financial Inclusion strategy (NFIS) for the next five years (2016-2020). The Strategy provides a clear road map for promoting financial inclusion and highlights key targets that the Government of Rwanda has pledged to achieve by 2020.

The overall aim of the NFIS is to increase the level of formal financial inclusion amongst adults in Rwanda from 68% in 2016 to 85% in 2020 and total financial inclusion from 89% to 95% respectively.

Attitudes: Respondents had generally positive attitudes toward data but lacked a specific budget for data

management and a clear data strategy. Only 45% of FSPs had a specific budget

allocated to data collection, storage or use and only 59% had a clear and

agreed-upon strategy.

Resources and infrastructure: The majority had a data analyst and did their analysis

in-house. Data is typically stored in a centralized data server on the premises.

Types of data: Most respondents make use of customer transactional data, customer

interaction data, as well as identity verification data. Alternative data is often not used for

decision-making purposes. Respondents with a data analyst use more sources of data than

those without an analyst.

Reasons data is used: Data is mostly used for marketing and product

development, internal monitoring, and compliance reporting.

Future data use: Respondents are inwardly focused and report having plans to train staff and use alternative data. They

also want to enhance the use of data for internal monitoring.

Data challenges: The most common challenges include data related issues: data

not being accessible, missing data, poor data quality, most recent data not available,, staff

challenges (skill shortage & no dedicated data staff), and budget constraints.

Deep Dive FinScope 2016 Women Thematic report AFR in collaboration with Insight2Impact (i2i) and FinMark Trust hosted a two-day workshop from 22nd-23rd August 2017 that focused on encouraging financial institutions to develop and promote women centric financial products and services as a means of embracing “Women Financial Inclusion in Rwanda.” Those in attendance included the Deputy Governor BNR, Dr. Monique, UN Women Representative in Rwanda Ms. Fatou Lo, CEO’s and Senior Managers of financial institutions.

The primary objective of the workshop was to have a deep dive into the FinScope 2016 Women Thematic Report as well as train Financial Service Providers on use of financial data to drive evidence-based decisions in areas such as product design and implementation, and strategic investments.

An evaluation of the workshop revealed that the workshop was beneficial to all those who participated and 79% reported to require additional support in data analytics skills. Additional areas of support included; Training on data analysis in Product Development and Product design, Data interpretation, Process of product design, Raw data, Developing Innovative products.

Transforming SME finance in Rwanda: Deep Dive FinScope 2016 SME Thematic Report The “Transforming SME Financing in Rwanda” workshop organised by AFR in partnership with MINICOM was held on October, 19th, 2017 at Lemigo Hotel with. The 95 participants represented government institutions, NGO’s, SME clusters, financial institutions and development partners. The main objective of the workshop was to create an understanding of the key sector dynamics, challenges and opportunities to drive innovation by making the 2016 Finscope SME thematic report findings and recommendations more actionable.

“The sector is the driving force of private sector growth and development. This forum therefore presents an opportunity for SMEs and stakeholders in the financial sector to rethink and discuss their contribution in unlocking barriers that affect SMEs promotion.”

Mr. Michael SeberaPermanent Secretar, Ministry of Trade and Industry

Ms. Waringa Kibe, AFR Country Director, Waringa Kibe urged decision makers to use the data provided in the report to inform strategic decisions.

SEEP Annual ConferenceTogether with the Wood Foundation and TIGO Rwanda, Ms. Waringa Kibe, AFR Country Director made a presentation on Financial inclusion for tea farmers and pickers through digitising payments at the SEEP Annual Conference in Virginia USA on 4th October 2017. The presenters shared lessons learnt from the joint project that digitised payments to tea farmers and pickers from three tea SACCO’s in Rwanda. These included increased profitability for the SACCO’s with some increasing savings by 40%, use of mobile money services by over 9,000 members and changes in the lives of the clients as a result of adopting digital financial services.

AFR hosts international Microinsurance Conference AFR with its partners, namely Munich Re Foundation and Rwanda Insurers Association (ASSAR), organised the 4th Eastern and Southern Africa Regional Conference on Microinsurance from the 28th to the 20th of August 2017. Accelerating the development of inclusive insurance markets in Southern and Eastern Africa was the overarching theme of the conference which showed that industry, supervisors and donors are committed to the inclusive insurance agenda and ready to build a sustainable, inclusive insurance market and enable millions of people working in the informal sector to manage their risks and improve their livelihoods. According to the 2015 Microinsurance Landscape Study:

Rwanda has the sixth highest microinsurance coverage ratio in

East Africa

of the over 12 million people living in Rwanda are covered by

microinsurance

of adults Rwandans are using insurance

<2% 9%here to read more about the conference (www.newtimes.co.rw/

section/read/219017)

Click

UN Women Representative in Rwanda, Ms.Fatou Lo

http://www.newtimes.co.rw/section/read/219017



Monitoring and Results Management (MRM)

Communication and AFR Visibility

AFR continues to support the collection and dissemination of strategic financial analysis to improve the understanding of the supply and demand for financial services. AFR’s knowledge management system encompasses a comprehensive M&E function to facilitate timely result-based monitoring, demonstrating value-add by each intervention so that replication and scaling up can be justified.

Results from project monitoring across the AFR portfolio are collated and disseminated nationally with the aim of promoting dialogue, learning and cooperation between the key stakeholders. AFR ensures that knowledge and information are shared widely, to increase the uptake of innovative approaches.

2016 Annual Review by DFID

Impact assessment for three Phase I projects

AFR Phase II Log Frame Revised

DFID Rwanda Internal Audit: Week of 27th November – 1st

December 2017

Baseline surveys conducted

Baseline survey for Automation of the U-SACCOs Project

Baseline Survey for Automation of Non-U- SACCOs and MFIs

Baseline for Dairy Financing Project.

Baseline study for the Digitisation of Savings Groups project

Development of Value for Money guideline and compendium of indicators for FSD network

AFR Board and Investment Committee workshop

on the essence of Market Systems for the Poor (M4P Approach)

FSD network conference themed “The Changing Landscape of Financial Sector Development in

Africa: Where from and Where to next”

Participants at the M4P workshop

Human Resources

Funding

P.O Box 1599 KG 5 Avenue, No 13 – KacyiruKigali - Rwanda

The Road behind the Netherlands Embassy

+250 782 507 751

[email protected]

www.afr.rw


The AFR team is almost complete with eight new staff recruited in 2017

A one-day team building workshop was held at Golden

Tulips Hotel in Bugesera.

AFR office branding and installation of air conditioners

ABOUT AFR

AFR is a Rwandan not for Profit organisation, established in March 2010 by the governments of the United Kingdom (UK) and Rwanda with support from the UK Department for International Development (DFID), and the World Bank. Existing funders of AFR include DFID, The MasterCard Foundation, Sweden, USAID, and KfW.

AFR works as a catalyst for financial inclusion by stimulating financial sector stakeholders to provide appropriate products and adequate services. AFR supports the development objectives of the Government of Rwanda by aligning all its interventions to the national policy frameworks including the Financial Sector Development Programme (FSDP) II and the Economic Development and Poverty Reduction Strategy (EDPRS).

DFIDUSD 14,700,000(GBP10,500,000)

USAIDUSD 3,000,000

SWEDENUSD 2,456,714

The Master Card FoundationUSD 11,486,494

Funds approved by donorsTotal USD

31,643,2082016-2020

Please contact us for more information

FOCUS AREAS

TO CONTRIBUTE TO A DEEPER AND MORE INCLUSIVE FINANCIAL SEC TOR THAT SUPPORTS THE LIVELIHOODS AND WELL-BEING OF LOW INCOME PEOPLE IN R WANDA.

STRATEGIC GOAL

BUDGET 2016-2020

31,643,208 USD

LOGFRAME TARGET 2016-2020

1,840,000of which 60% are women


Agriculture finance

Risk mitigation to include inclusive insurance

and the establishment of Long Term Saving

Scheme

Innovations with a focus on digital financial

services

Market development and facilitation

access to finance rwanda 2017 · project 2: automation of non-umurenge saccos and mfis through...

Documents