How ready is Rwanda for FinTech investments?
As Rwanda establishes the Kigali International Financial Centre which aims at positioning Rwanda as a preferred financial hub for investments into Africa, Fin-tech is emerging as one of top investment opportunities on the continent.
This among other things calls on the country to review its readiness for the Financial Technology (FinTech) investments to attract more local, regional and global investors to Rwanda as their hub.
Investor readiness for FinTech investment which is a relatively new but popular sub-sector requires an economy to have ideal conditions with regard to regulatory environment, opportunities, availability of skills among others.
Speaking at the recent Singapore Fintech Festival, Michelle Umurungi, a Senior Strategy and Policy Analyst at the Rwanda Finance Limited, said that the country is increasingly becoming the preferred hub for African and global Fin-tech firms looking for incorporation, a proof-of-concept hub and a gateway to other African markets.
Rwanda Finance Limited (RFL) is a corporation owned by the government whose primary responsibility is to develop and promote Kigali International Financial Centre (KIFC).
Under the auspices of the Singapore Fintech Festival, earlier this month, Rwanda hosted an event highlighting the country’s FinTech journey with a focus on talent and entrepreneurship.
The global event was a five-day long around the clock hybrid affair attended by over 60,000 participants, representing 130 countries.
“Rwanda aims to cultivate a supportive and competitive environment for Fintechs looking to incorporate their companies in a safe and competitive jurisdiction or test their new and innovative products. Rwanda offers a great environment with the following incentives,” she said.
This competitiveness has among other things been boosted by improvements of the talent landscape which investors say is a prerequisite for investments.
Over the years, the entrance of international higher learning institutions such as Carnegie Mellon University, African Leadership University as well as African Institute of Mathematical Sciences have enabled addressing skills gaps.
In 2018, the government entered into a partnership with global technology training and job placement firm, Andela aimed at placing Rwanda as a Pan-African tech hub and building local capacities.
Mike Ndimurukundo the Managing Director at Andela Rwanda said that currently, the talent landscape has turned around significantly over the last few years with ability to compete with global talent in some aspects.
This he said has made it possible for Fin-tech firms entering the Rwandan eco-system to have access to globally competitive skills at affordable rates.
This, he said, is both in hard and soft skills, which are ideal for the development of fin-tech firms.
Olivier Mugabonake the Managing Director of AD-Finance a FinTech in the microfinance industry operational in multiple Africa markets as an operator, Rwanda increasingly has necessary skills and capacities out of the local initiatives to boost talent.
Regulations and support services
Last week, Jeff Bezos backed FinTech Company, Chipper Cash, which facilitates cross border payment and cash transfers debut in Rwanda.
The firm’s recently-appointed Country Manager Jovani Ntabgoba said that the regulatory and support services enable the firm to gain relevance locally and regionally.
“The Rwandan government has set up sound business regulations, state of the art ICT infrastructures, academia and Rwanda Finance Limited among others. Chipper Cash is strengthening its presence in Rwanda so as to leverage these services and better serve both Rwanda and other African markets seamlessly,” he said.
The regulator and support is not only for refined firms with proven models. The country has also set itself as an ecosystem to test out concepts which can be scaled out to other markets when proven ideal.
Tesi Rusagara, the Managing Director of Kigali Innovation City said that investors are welcome to use Rwanda as a test bed, destination for trying out new concepts and turn it into a business before rolling out to local, regional and continental markets.
Across the country and the region, there are market opportunities for Fin-tech firms as the countries seek to drive financial inclusion. This includes financial inclusion, financial savings services among others.
Steve Shema, the Founder and Chief Executive of Exuus Rwanda, which runs a FinTech firm that facilitates digital savings said that over time, there is an appreciation of digital financial services across the market and the region.
It’s because of such opportunities that the number of registered fin-tech firms have grown to 45 as of 2019 from 5 in 2015.
Speaking to The New Times, Ntoudi Mouyelo, the Strategic Advisor at Rwanda Finance Limited said that Rwanda has also shown willingness to upgrade and develop the regulatory framework to make innovation possible enabling Fin-tech firms to have relevance.
“FinTech is a priority for Rwanda. The country offers an attractive fin-tech investor with the ecosystem developed with both public and private institutions,” he said.
Other factors that have improved the country’s readiness for Fin-tech investments include ease of registering a business in 6hrs, innovation friendly regulatory ecosystem as well as access to world class accelerators, investors and Venture Capitalists.