African Market to Watch: A Road to Economic Development with Rwanda and Fintech by Richie Santosdiaz for The FinTech Times
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African Market to Watch: A Road to Economic Development with Rwanda and Fintech

The landlocked country in the African continent that at one point was home to a  Civil War, Rwanda, is now often remembered as a role model with its strong and fast economic growth.

Its troubled past during the Rwandan Civil War can be recalled by many as it was relatively recent. For the problems it had, the countries aim to replicate its economy and essentially be the ‘Singapore of Africa’ and getting comparisons to being the ‘Switzerland of Africa‘ doesn’t seem to add up at first. However, since the Civil War, Rwanda has rebuilt its economy and has made an economic transformation in relatively little time and continues to do so.

Kigali is the capital and largest city of Rwanda IMAGE SOURCE GETTY
Kigali is the capital and largest city of Rwanda IMAGE SOURCE GETTY

As a whole, its economic development can be seen as it has become a country that is not only pro-business but foreign direct investment (FDI) friendly. According to the Doing Business 2019 Report by the World Bank, despite most African nations not ranking well in the ranking, Rwanda (at 29th place) is the second highlight African country followed in first place in Africa by Mauritius (globally Mauritius ranked 20th). The report highlighted that Rwanda ranks among the best globally in the Doing Business areas of Registering Property (with a rank of 2) and Getting Credit (with a rank of 3). The same as in New Zealand, Rwanda with regards to registering property has an efficient land registry, taking seven days to transfer property and costing only 0.1% of the property value.

As a whole, as with not just many parts of Africa but the Middle East and Africa (MEA) region, economic development strategies and their implementations have been spotlight and priority initiatives from various governments and that includes Rwanda. Known as Rwanda Vision 2050, the economic development strategy shares similar foundations as others in MEA such as improving the standard of living for its citizens, digital transformation and a wider diverse and innovative economy. Given that Rwanda and much of Africa have had difficult pasts and high poverty when compared to developed economies, there is a much more focus on improving the standard of living and alleviating poverty rather than the Gulf Cooperation Council (GCC) region for example, where there it is more on diversifying the economy and being less reliant on oil and gas. A noticeable milestone of 2050 is that it targets Rwanda to be a “Globally Competitive Knowledge-based Economy.”

In relation to the financial services sector, according to the Rwanda Development Board, the sector has made significant progress and development to convert into a modern one. The Board highlighted that the financial sector overall is stable, profitable, well-capitalised and liquid. The wider ecosystem has a growing and diversified number and types of institutions, a stock exchange, banks, microfinance institutions, savings and credit cooperatives (SACCOs), insurance companies, and pension funds. Kigali is the capital and largest city of Rwanda and also its main commercial and financial hub.

The banking sector according to the Board continues to be the main engine in the financial system with banks representing nearly two-thirds (66.1 per cent), followed by the pension, insurance, and microfinance with 17 per cent, 9.7 per cent, and 6.4 per cent, respectively. Examples of some of the banks in Rwanda include Access Bank Rwanda, Bank of Kigali, Commercial Bank of Rwanda and Banque Populaire du Rwanda SA (BPR).

In terms of the future growth of the financial services industry in Rwanda, COVID-19 aside, a major example and association in its vision and future has been the Kigali International Financial Centre (KIFC). KIFC is a government initiative that aims to position Rwanda as a major business and financial hub in Africa which among other things involves reforming the financial services. Within just months since the kick-off of the initiative, KIFC has inked a number of partnership agreements with global institutions such as Morocco’s Casablanca Finance City (CFC). Part of attracting future investment and positioning the country via KIFC is reforming the financial services sector. Aiming to be a cluster, Rwanda Finance Limited (RFL) is a private agency whose main responsibility will be to promote and develop KIFC.

Due to its natural beauty, landlocked borders and economic stable in recent memory, the country has been referred to as the “Switzerland of Africa” IMAGE SOURCE GETTY
Due to its natural beauty, landlocked borders and economic stability in recent memory, the country has been referred to as the “Switzerland of Africa” – pictured are the Virunga Volcanoes IMAGE SOURCE GETTY


With regards to tech as a whole, the country is also positioning itself to be a strong regional player promoting innovating and entrepreneurship. Led the way by Tunisia for example, last year saw Kenya in the African continent pass its Startup Bill and Rwanda also made its headlines by introducing its own Startup Act to help further spur the development and regulation of the ecosystem. The same source, Rwanda’s The New Times, said that in 2016 the Global Information Technology Report by the World Economic Forum ranked Rwanda first in government success with respect to ICT promotion. In addition, Rwanda according to ecosystem ranking platform StartupBlink’s latest report ranked it the second-highest in Africa (65nd globally overall) after Kenya which was the highest in Africa (which ranked 62nd globally) in terms of its startup ecosystem.

In terms of foreign investment, this has been growing as the country, like its financial services and the wider economy, has attracted companies looking to do business in the region. For instance, Norrsken with its first expansion outside of Stockholm, Sweden is looking to build a location in Kigali called Norrsken Kigali which is planned to be open this year. It will aim to house 600 entrepreneurs, investors and corporations, catering to be a gateway for the growing East African market; this is a market of around 8-900 million people with a young and tech-savvy population with some of the world’s highest mobile banking usage globally. Other examples of its ambitions to attract investment and grow its tech ecosystem include the Kigali Innovation City (KIC) technology hub project.

With respect to fintech, Rwanda’s short yet impactful economic transformation can be felt in the sector. It is regarded globally across various research where its largest city Kigali and Rwanda as a whole is becoming an emerging fintech hub, such as research conducted with The Fintech Times. Beyond just four cities emerging as fintech hubs (Johannesburg and Cape Town (South Africa), Lagos (Nigeria) and Nairobi (Kenya), as well as Cairo (Egypt) which often is categorised in the Middle East rankings – cities like Accra (Ghana) and Kigali, (Rwanda), have also made strides to be strong fintech regional players.

This is noted in the number of fintech start-ups, which have almost tripled in a five-year time frame, having gone from just 17 in 2014 to 44 in 2019. In addition, besides its growing and diversified financial services ecosystem, which most be default also directly relate to fintech, there are growing direct mechanisms and catalysts appearing. For instance, associations such as the Rwanda Fintech Association are in there to help build a community of like-minded talent to help further foster the sector. Importantly, from a government level, the National Bank of Rwanda (BNR) has implemented its own sandbox regulatory framework for fintechs.

Three-fourths of Rwanda’s fintech startups are focused more on “fin” rather than “tech”, with payments and remittances being the most common category of fintech applications. Despite the high concentration of fintech start-ups offering payment products and services, demand in other segments such as insurance or personal finance management is still lacking. As is the rest of Africa as a whole, funding opportunities remains to be a challenge facing startups in the tech community.

Despite COVID-19 playing a large part in the future of the global economy’s recovery, including that of Rwanda, the country’s push to be a knowledge-based economy by 2050 has been planned prior to the world having to go digital. The effects of that decision to promote wider digital transformation will continue to play out. In addition, Africa as a whole has much potential and collaboration, in particular with the African Continental Free Trade Agreement (AfCFTA). 

Nevertheless, Rwanda will continue and take its place as not only just an economy to watch for Africa’s fintech hub but potentially a player on the global stage.


  • Executive Economic Development Advisor (Emerging Markets) | Contributor

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