Development of the Digital Financial Ecosystem in Rwanda: Patterns, Trends, and Way Forward

ABSTRACT Digital financial services (DFS) have the potential to promote payments’ efficiency and boost financial inclusion even in remote areas with minimal traditional financial infrastructure such as bank branches. In Rwanda, the digitization of payments is a key policy strategy in a bid to transform the country toward a more cashless and knowledge-based economy. This article traces the development path of DFSs in Rwanda over the decade 2011 to 2021 using a mixed-methods approach, where the quantitative approach explores dynamics of key DFS indicators and the qualitative approach explores opportunities and challenges for further promoting DFS in the country. The findings indicate that between 2011 and 2021, the number of people using Internet and mobile banking increased quite substantially. The number of active mobile money subscribers increased from 1.6 million in 2012 to 5.1 million in 2021, while credit cards increased from 115,200 in 2011 to 686,309 in 2021. The transactional volume and value also increased remarkably, partly fueled by COVID-19 and innovative use of mobile money, including electronic tax payment. The article recommends improving Internet connectivity and quality, promoting digital literacy, improving interoperability, and enhancing cybersecurity to further boost DFS in Rwanda.