CEO Tineyi Emmanuel Mawocha and Acting CEO Germaine Mukamusana of Urwego Opportunity Bank Rwanda explain the financial inclusion efforts being made by the bank and the far-reaching impact of its sustainability-focused services, such as its ‘mHose-mVisa’ mobile wallet and e-banking facilities, on Rwandans' lives in rural areas.
Following the 2012 US-African Leader Summit, the US engaged to invest over $37 billion in Africa. What are the next steps in achieving Africa’s internationalization?
Tineyi Emmanuel Mawocha (TEM): A strong leadership in different African countries is a necessary step to enhance the continent’s accessibility from an international point of view. Policies have to be passed to encourage entrepreneurship and to remove trade barriers. Rwanda is an excellent example of that. The leadership is focused on attracting foreign investment and easing the business procedures. Starting a company here is quick. Getting a work permit here is quick. The US will not be attracted to African nations if the latter make it difficult for businesses. Here in Rwanda, we have created an enabling environment.
Africa is the youngest continent in the world and it is projected to boast the largest labor force globally. What are the challenges this creates and how should they be addressed?
TEM: The main challenge is to give back to the children. Especially in Rwanda, we have a mission to take care of the children, to treat, educate and nourish them. Family planning is key. We want to ensure that families are well provided. Furthermore, education and health care are also key. Ensuring that every kid in Rwanda has access to medical treatment and to academic opportunities. We have to make sure that children have schools nearby. For the ones who cannot afford schools, we must provide them with assistance. Having a high level of literacy is the foundation of a developed country.
By 2020, the government aims to financially include 90% of Rwandans. How would you describe the progress that has already been made to a foreigner?
Germaine Mukamusana (GM): The progress has been noticeable. SACCOs (community savings and credits cooperatives) have been put in place in each sector of Rwanda. This allows all Rwandans to have access to financial services. Before, it was difficult for small farmers to have access to banking services. Now, Rwandans are able to have micro-loans and are able to place their money [into the system].
In each sector, the whole population is mobilized to put their money in SACCOs instead of hiding it under their mattresses. Furthermore, there was previously in Rwanda a lack of collateral documentation. This diminished people’s access rate to financial services and loans. So Rwanda’s government went ahead. Today, anyone that owns land has a land-act, which enables access to financial services.
In 2011, Urwego Opportunity Bank grew at a rate of 92%, proving that fighting for a “popular-cause” is not only an ideological battle, but also a business opportunity. Could you comment about the surprising profitability of this sub-sector?
TEM: Our shareholders are predominantly interested in keeping our organization sustainable as opposed to taking dividends out of the profit. We are the only local financial institution that is not targeted at profit. Our main interest, as a company composed of international Christian NGOs is to “transform lives.” That is our primary motivator. Obviously we have to do it for a return, to make sure that we are sustainable.
Over the last few years, we have reached a stage of profitability that led us to expand our operations. If you look at where we are now, we grew both in terms of physical presence and in terms of customer-access. We now have 17 branches to make financial transactions spread out across the country. Even though each new branch is a 70 square meter office, it is equipped with full operational services, from foreign currencies to deposit facilities, through loan provisions and cash-withdrawal. We are building a huge and costly infrastructure to make it easier for our clients to access the best banking services.
We have also introduced mobile-banking services with the implementation of our own mobile Visa-card, called “mHose-mVisa.” You do not need a wallet if you have a bank account with us. For our poorer customers, it allows them to have a direct access to a bank account via their telephone. They can now pay for electricity and water through their cellphones. They can also send money or receive a loan through the mobile system. To do so, we partnered with Tigo. Tigo has a program called Tigo-cash. If you use this program you do not have access to interest rates. However, with our new phone banking service, it is now possible to do so! We have created a 7% interest rate savings account. Offering a savings account is another tool we offer to our clients.
How do you educate the population to use these financial services?
GM: Urwego has a program aimed at teaching financial literacy. Before administering our services to a client, we make sure that they receive the right training. We also do an accessible demo, as a refresher, to show and remind our clients how to use these services. Some of our clients buy sim-cards but do not have the money to buy a phone. So what we do is that we let them use our working equipment to perform transactions and consultations. Statistics show that we have a positive impact.
What is the feedback you receive from your clients?
GM: Before, they used to spend an outrageous amount of time walking to the nearest bank. Now, with our electronic banking services, they use this time to further develop their business activities. It improves their lives and saves their time.
One of your partners, Energy Development Rwanda, is currently calling for investors for their solar, water and transportation operations. What opportunities would you highlight to attract investors?
TEM: I want them to know that at Urwego, we have the risk appetite to go and reach the deepest rural areas. Those clients live far from any bank. Those are the people who need access to finance. The way to reach them is to use electronic banking. With our electronic solutions and our new location agents we enable our clients to use financial services.
My work is to make sure that my clients have access to power. By doing so, they are able to access their phones and use our services. This is a big opportunity for foreign investors as we need funds to ameliorate our energy production and electronic services. Rwanda’s electrification level is up to 26%. Such a low level of power generation directly leads to investment opportunities, as there is a great hole to be filled.
In 2020, how would like to see Rwanda?
GM: As a Rwandan and as an Urwego Opportunity Bank worker, my vision is to see all Rwandans having access to financial services. My vision is to see the lives of Rwandans holistically transformed. This goes together with the program of the country. Along with the government’s vision, I want to see the number of Rwandans that do not have access to financial services reduced. My motive is not to report the amount of loans we carried out, but rather to report the number of individuals that benefited from these loans. Together with the government, we will enhance access to banking services so that 70% of Rwandans are financially included by 2020.