Rwanda braces itself for cashless economy

16 Novembre 2017

Kigali, Rwanda, November 16  (Infosplusgabon) - Rwanda on Thursday launched a one-month public enlightenment campaign before introducing the use of electronic money instead of cash transactions.

Dubbed 'Accelerating the move towards a Cashless Rwanda through Public-Private Partnership', the campaign seeks the support of all stakeholders who should agree on practical ways to tackle the obstacles related to illegal transactions, the National Bank of Rwanda said.

According to the bank, electronic money will eventually replace the current use of cash payments done by individuals and financial institutions in the East African nation.

Through the electronic facility, bank clients can directly access their accounts on the go and settle transactions without visiting their bank branches, the central bank said, encouraging the public to use mobile banking application and point of sales terminals.

"Some digital financial services are now available round-the-clock for business people to make payments in the convenience of their homes or offices across the East African nation," said  Central Bank governor John Rwangombwa, stressing that current mobile money should be used to pay for goods and services and not withdrawn as cash.

"With the adoption of the new approach in the financial sector, it will be more costly [for the public] to withdraw cash than using it to pay for goods or services," he said.

Rwandan policymakers and economic stakeholders are convinced that  moving from cash to digital payment can provide enormous direct advantages to consumers, businesses, government and the population at large.

This is because businesses lose around 6% of their sales through cash handling costs, shortages, theft and counterfeit, according to the central bank.

A study conducted in 2016 by the US-based McKinsey Global Institute showed that effectively enabling digital financial services could boost the GDP of emerging economies by 6% by 2025.

This is because with cashless economy all transactions are done through organized channel that is through banks and financial institutions, and it results in increase in tax revenue for the government, it said.

"Bankers and their partners are now ready than ever to lower costs of these e-transactions and invite private sector members to challenge them more on what else to improve," said Maurice Toroitich, chair of Rwanda Bankers' Association.

All stakeholders are convinced that this new innovative banking approach will also contribute to saving around 2 billion Rwandan Francs (US$2.38 million) that the central bank allocates annually for printing banknotes and minting coins.

"This innovation will increase access to financial services in the country," Toroitich observed.

FIN/INFOSPLUSGABON/AAR/ GABON 2017

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