Building financial capability in Rwanda

Rwanda’s level of financial inclusion is fast increasing, propelled forward by ambitious targets and innovative policy and regulatory approaches. The 2008 and 2012 FinScope surveys showed that financial inclusion had doubled from 21 to 42 percent and the 2015 iteration is expected to show continued progress. But with such a large and rapid movement of adults into the formal financial sector, ensuring that the ‘newly banked’ are able to effectively and responsibly select and use financial products is critical.

While current trends in Africa focus on technology-driven models like mobile money, traditional financial service providers like Rwanda’s ubiquitous Umurenge Savings and Credit Cooperatives (SACCOs) are still key to bringing Rwandans into the formal financial sector and offering access to a full range of financial products. These SACCOs - with their rural and ‘newly banked’ member base and community-oriented mission - are also a promising channel for delivering financial education. To that end, The World Bank, under the Financial Inclusion Support Framework (FISF) program and in partnership with the Ministry of Economic Planning and Finance (MINECOFIN), the Rwanda Cooperative Agency (RCA), and Enclude, Ltd, is developing a financial education curriculum for SACCOs.

Over the past few weeks we have piloted the program in five SACCOs to evaluate the salience and relevance of the curriculum content, the effectiveness of the delivery channels, and the sustainability of the training structure. Initial feedback from SACCO staff and members are encouraging.  Yet we’ve learned a lot and plan to make important tweaks for the full-scale implementation, including a longer training for SACCO staff, increased engagement of SACCO loan officers, and follow-up visits by master trainers.

The pilot financial education curriculum covers a range of themes including goal setting, budgeting, responsible borrowing, and consumer rights. It is designed to be delivered through interactive and entertainment-based classroom training, reinforced with take-home tools and posters in the SACCOs.

To ensure that the training is delivered continuously and sustainably, the program relies on SACCO staff and local leaders to provide the training on a regular basis as a core offering for members in each SACCO. These instructors are given their own training by professionals associated with the Rwanda Institute of Cooperatives, Entrepreneurship, and Microfinance (RICEM).

We are well aware that history of good intentions is littered with ineffective financial education programs. Yet there are several features that have proved to be effective and which we have sought to incorporate including:

• Edutainment? Check. Each module is built around a radio drama and for SACCOs with access to a television, the audio is set to a video cartoon, designed by Inkstain, a Kigali-based animation studio.
• Rules of thumb? Got ‘em. The curriculum and supporting materials heavily emphasize these easy-to-remember and actionable rules.  
• Teachable moments? Yes! When Rwandans interact with their SACCO they are already in the mindset of making financial decisions, a great time to embed financial education.

We’re also doing our best to build on successful local models. The audio component was recorded using actors from Rwanda’s most popular radio drama, Urunana. These voices are instantly recognizable to most Rwandans. Better yet, Urunana itself has incorporated financial education themes into the storylines this year, and we have worked with their team to align the main messages so that Rwandans will hear similar messages from different channels, but with the same voices to facilitate the link.

By now the skeptics among you are surely thinking, “ this all sounds good in a blog, but will it work?” The Rwandan government is also interested to know. We’re collaborating with researchers at the World Bank and Innovations for Poverty Action (IPA) to conduct an impact evaluation of the full-scale program. We’ll use a randomized roll-out of the training-of-trainers to generate a reliable counterfactual and then collect survey and administrative data to determine whether the trainings have an impact on the knowledge, attitudes, skills, and behaviors of Rwandans. We’ll be particularly interested in whether the training increases the prevalence and rate of saving, use of loans for productive investment, loan repayment, account openings at SACCOs, and household financial security. We hope that the results will feed back into the program design and operation so that we can build up what works, remove what doesn’t, and use limited resources efficiently.

The pilot will wrap up next month and the goal is to begin preparations for Phase I of the national scale-up by September. Stay tuned for an update later this year as implementation gets underway.