Mobile savings app empowering women in Rwanda

In northern Rwanda, savings and loans are becoming more secure and efficient due to the digitalisation of savings groups. 

With funding from Irish Aid, Trócaire and partner Duterimbere ONG, are using mobile phones to digitalise 44 Village Saving and Loan Associations (VSLAs) in the Rulindo and Gakenke districts of Rwanda. The project aims to improve women’s economic empowerment by increasing their participation in decision making in rural areas of Rwanda. 

Village Saving and Loan Associations (VSLAs) bring together 25-30 individuals, and typically over 70 percent of members are female. The purpose is to provide simple savings and loan facilities in a community that does not have access to formal financial services. Members save frequently in small amounts, access credit on flexible terms, and invest in different income- generating activities. Loans can provide a form of insurance to members and initial capital for initiating business, supplemented by a social fund which provides small but important grants to members in distress.   

The VSLA is a self-managed structure, and members set up their own internal regulations with the support from the implementing partner’s staff, as well as a mentor. A VSLA management committee comprises a president or chairperson, a record-keeper, a treasurer, and two money controllers. Members’ savings and loans are traditionally recorded manually in individual passbooks, loans register, and a central ledger.   

Digitalisation more effective than traditional cash-based models  

In traditional VSLAs, members attend weekly meetings in person, and save, receive loans and repay loans in cash. Decisions, such as on loan requests, are relatively slow, as members have to get together in person to make them. The record-keeper records every transaction in the member’s passbook, the loans register, and the general register, but errors are often made in record-keeping and hard-copy records are sometimes lost. Cash is also prone to being stolen. 

Digitalisation, by contrast, offers the prospect of reducing the frequency or length of physical meetings, automating record keeping, speeding up transactions, reducing the risk of cash being stolen, and ensuring transparent monitoring of VSLA activities.   

The digital platform, known as the SAVE app, allows VSLA members to save from anywhere using their mobile phone. VSLA members still meet for cross-checking physically, and the VSLA’s management committee continues to stamp the member’s passbook according to the number of shares saved.   

The same process is used for checking loan repayment. Continuous follow-up is conducted by Duterimbere ONG, the mentors, EXUUS and Trócaire. 

Emerance Nyirankunzwenabake, a VSLA member in Gakenke District said: “Before, when we used to save money hand-to-hand, we could spend two hours in a VSLA meeting. But today, by using SAVE app, just 40 minutes is enough to close all VSLA’s activities.” 

Another user of the SAVE app, Xaverine Mukankubito a VSLA member from the Rulindo District said: “Today, we save using our mobile phones, and if you need to request a loan you use the phone, wherever you are, and you get your money immediately. For instance, if I go to Kigali and run out of money, I can easily call the management committee requesting a loan, and without any delay I get money and continue buying, and so I do my business faster.” 

Trócaire Country Director in Rwanda, Marleen Masclee, said the app helps improve women’s empowerment and livelihoods.  

“Grouping people together and supporting them to save and invest in their livelihoods has had a great impact. The introduction of the digitalisation of the VSLA system has been a change in how things were done. This innovation has shown us a large number of lessons and advantages.   

“Before, you would see people coming together and put money in a cashbox, and they would have to write everything down in a book, which was a time-consuming exercise. Things were quite slow in terms of decisions making and approval of loan requests because everything had to be done when all group members would be physically together. Now, with a digital system in place, people can save in the privacy of their home, using their mobile phones (just a basic mobile phone is needed), they request loans, they put in their savings, and the decisions can be made at any time of the day.” 

“Another important positive impact can be seen in that it is now much easier to link women and men to formal financial institutions as the digital system can generate reports and can show a saving and repayment history.”  

Savings groups play an important role in Rwanda, particularly in rural areas and among women. In 2020, 78 percent of Rwandans used some form of informal mechanism (such as community-based savings groups) to manage their finances.  

Rwanda has been encouraging the financial sector and ordinary citizens to embrace electronic platforms to carry out personal financial transactions in a move towards a cashless economy and achieving associated goals around financial inclusion, digital literacy, long-term savings, e-governance, business creation, health insurance, women’s empowerment, and more. In 2020, 86 percent of the population had access to a mobile phone, while digital payments made up 30 percent of transactions in 2020, up from 19 percent in 2016.