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New Technology to Upgrade Micro Finance Institutions to Commercial Banks

by Daniel Sabiiti
10:33 am

Rwandans especially farmers banking with MFIs and Saccos are set to benefit

Rwanda Microfinance institutions (MFIs) will now be able to provide digital services to their clients following the introduction of a new innovative technology (ADBanking Quantum) that is expected to improve Rwanda’s financial inclusion goals.

ADBanking Quantum, is a new Core Banking system product that was recently showcased by ADFinance to stakeholders.

This new version, built using the latest technologies, will allow Microfinance institutions to offer digital services similar to those offered by large commercial banks.

It will enable paying bills, transfer to other banks, bulk payments, merchant payments and use of ATM machines, among others.

A FinScope survey of 2020 shows that Rwanda has reached 93% formal and informal financial services- however MFIs and Savings and Credit Cooperatives (SACCOs) still operate manually.

“For the past 15 years, we have been at the forefront of promoting financial inclusion through technology. With ADbanking Quantum, we are confident in our ability to continue serving our customers for the next 15 years and beyond,” said Olivier Mugabonake, the Chief Executive Officer of ADFinance.

Olivier Mugabonake, the Chief Executive Officer of ADFinance.

Rwanda has a Fintech Strategy 2022–2027 which guides the country in enabling a thriving fintech ecosystem, positioning Rwanda as a fintech hub and propelling the growth of the fintech industry-

The five-year strategy requires Rwanda to systematically and holistically support the fintech ecosystem and set up infrastructure.

The strategy has two key objectives to realize these policy goals: to set Rwanda up as a testing ground and as a Launchpad for fintechs in Rwanda and in Africa.

Rwanda’s fintech strategy and policy requires to systematically and holistically support the fintech ecosystem

The introduction of this new technology is expected to boost the performance of MFIs and SACCOs as Central Bank financial sector review reports indicate a sound financial sector which is adequately capitalized and liquid.

During the presentation of the Monetary Policy Committee and Financial Stability Committee (MPC/FSC) this February 2024, Central Bank Governor, showed that the consolidated Capital Adequacy Ratio (CAR) of MFIs was at 33.8% while banks were at 21.5%.

Microfinance institutions representatives welcomed the upgraded core banking system that has come at the right time to revolutionize the sector but also digitize their services.

Microfinance institutions representatives at ADFinance Open Day session held in KigalEgide Musangantwali, the IT Manager of SAGER Ganza Microfinance Plc, which has been using ADBanking since 2012 revealed that the advanced system would be the foundation that will allow them to achieve their digital transformation.

Jean Baptiste Uwemewe, the Manager of Gatare Tea Farmers Sacco said that since partnering with ADFinance, their clients have experienced a remarkable transformation in payroll processes and reduced delays in transfers.

Uwemewe said that previously, they would spend up to two working days each month to receive their salaries. However, with the new solution, this cumbersome process has been eliminated.

“Now, our clients can conveniently access their salaries directly from their mobile phones, which eliminates the need to visit our branch. Additionally, they have the convenience of applying for loans and receiving automatic disbursements, streamlining their financial transactions like never before,” Uwemewe said.

Tech experts behind the ADBanking Quantum technology

Microfinance institutions representatives asking questions about the new technology

 

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