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Introduction


We are glad to announce that we have entered a new era: Access to Finance Rwanda’s (AFR's) Phase III strategy which will cover the next five years (2021-2025). During Phase I (2010-2015) and Phase II (2016-2020) AFR played a pivotal role to facilitate positive change in Rwanda’s financial sector through its partnerships with the public and private sector leading to increased financial inclusion and enhanced livelihood opportunities for poor women and men. In this newsletter edition, we shall share with you key highlights of our new strategic plan.

The new strategic plan is the blueprint around which we will organize our efforts for the next five years to facilitate a diverse and inclusive financial sector that delivers real value to the economy and people, in particular unserved and underserved populations.

The strategy is based on the key lessons learnt from AFR Phase I and II and key Rwanda’s development imperatives and builds on an analysis of constraints and opportunities informed by recommendations emerging from the project evaluations, literature review of other programmes, studies and surveys, findings from Finscope 2020, National Financial Inclusion Strategy (NFIS 2019 – 2024) and National Strategy for Transformation 2017-2024 as well as  AFR Phase III design - stakeholder interviews. 

Four pillars and three crosscutting thematic workstreams will form the basis of our work over the five-year duration of the strategy. The selected pillars of intervention include Deepening financial inclusion and resilience, Finance for Growth and Jobs, Research and Information, Digital Financial Services and Market Infrastructure. The crosscutting thematic areas are Gender and inclusion, agriculture and risk mitigation and in addition, there is a priority theme which is COVID-19 response and stabilisation.

I take this opportunity to recognise with appreciation our Funders (Foreign, Commonwealth and Development Office, Sweden, The MasterCard Foundation and Jersey Overseas Aid) for their financial and technical support to ensure that AFR achieves its goals and objectives. We also recognize the key role played by our Board of Directors, partners and stakeholders as well as continued support from the Government of Rwanda.    

Last but not least, I would like to acknowledge AFR staff for their dedication, contribution and commitment towards the successful implementation of the last strategy. I am confident that we will again achieve our strategic goals and ultimately our new vision “to facilitate a diverse and inclusive financial sector that delivers real value to the economy and people, in particular unserved and underserved populations.”

Strategic pillars

The theory of change for AFR Phase III is based on the market systems framework and is an evolution from the theories of change for the first two phases of AFR. As a Making Markets Work for the Poor (M4P) programme, AFR works in all areas of the market system including the core demand and supply, supporting functions and rules. In doing so, we will support market players to address constraints and to take advantage of opportunities to increase financial inclusion for underserved populations and champion financing to SMEs for improved economic growth and decent jobs. Creating the appropriate enabling environment through a focus on policy, regulation, financial infrastructure, etc., are vital and important for the effective and efficient development of the Rwandan financial sector. Four pillars and three crosscutting thematic workstreams will form the basis of AFR’s work over the five-year duration of the strategy.

The selected pillars of intervention include the following:
This phase will focus on utilisation of financial services by underserved groups (women, youth, refugees, People with Disabilities, smallholder farmers, informal sector workers, etc.) in order to meet a need including usage and outcomes particularly in (i) ensuring ability to pay for services (ii) financing for implementation of initiatives targeting basic services (iii) promoting resilience and ability to manage risk (iv) ensuring equal access to basic services amongst disadvantaged groups, and (v) providing payments mechanisms.
AFR will focus on helping to unlock key market failures that have restricted diversified and balanced growth through supporting efforts to unlock growth and job creation potential in agri-processing, light manufacturing, ICT and logistics. Mapping of risk and access to finance challenges in particular values chains and exploring the constraints and opportunities within the overall market system is critical in building an understanding of the constraints that have affected the flow of finance to SMEs within the selected sectors.
In Phase III, AFR will play a key role in the development and dissemination of information to help develop a more efficient financial market in Rwanda, while at the same time developing the capacity of market players to develop and disseminate information for the benefit of market growth and sustainability after AFR’s exit.
AFR will continue, and potentially expand, its current digital infrastructure interventions such as interoperability of payment platforms and agent networks to facilitate inclusion of marginalised segments and deliver appropriate services to Micro, Small and Medium Enterprises (MSMEs). It will also focus on non-digital infrastructure interventions such as supporting the development of credit reference bureaus, collateral and contracts registries and platforms to support access to trade finance (factoring) and capital market instruments.

Strategic and priority cross-cutting thematic areas

Firstly across each of the pillars, AFR will think through how effective interventions address the gender and social inclusion challenges. Secondly, as the majority of the poor in Rwanda are involved in agriculture and thus a key sector for AFR’s efforts to increase inclusion, AFR will ensure interventions effectively improve agricultural productivity. Thirdly, we will focus on challenges faced by low-income people as most of them do not have risk mitigation mechanisms to cope and maintain gains achieved given the current ever-changing environment. AFR will also support initiatives to increase the ability of vulnerable segments and businesses to save, purchase appropriate insurance, pension products and other risk management mechanisms.

As far as COVID-19 is concerned, AFR will support the financial sector to contribute to stabilising household and MSME incomes as a priority theme across all planned interventions.
 
Alignment with Sustainable Development Goals (SDGs)  
 
AFR’s overall goal remains poverty elimination in line with Sustainable Development Goal (SDG) 1, we recognise the need to be more intentional in achieving SDGs related to real sector outcomes including inclusive growth, basic services and sustainability.
 
This new approach allows for AFR in Phase III to move beyond a narrow focus on financial market development outcomes, towards real and social sector challenges and opportunities (e.g., energy, healthcare and shelter), which align with SDG priorities; and beyond financial inclusion at the household and individual level.

AFR and the SDG Centre for Africa to collaborate on strengthening financial inclusion and financial sector development in Rwanda

In line with our current strategic plan, in April, this year we signed a Memorandum of Understanding (MoU) with The Sustainable Development Goals Center for Africa (The SGDC/A) for strategic partnership to collaborate on strengthening financial inclusion and financial sector development in Rwanda.

”Financial inclusion has been embedded in many of the SDGs, which underscore its critical importance that creates conditions for SDGs to be within reach.”  Ms Caroline Makasa, Acting Director General of the SDGC/A during the MoU signing event. For more information, please read
the press release.
 

For more details about our new strategic phase III. Please see our website.  
 
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