Innovation Unleashed: Transforming Rwanda’s Financial Landscape

Published 2 months ago
By BrandVoice Partner | Paid Program | By Paula Ingabire, Minister of ICT and Innovation in Rwanda, and Nick Barigye, CEO of Rwanda Finance Limited
Minister Paula Ingabire; image supplied
Minister Paula Ingabire; image supplied

Kigali continues to be recognized among the top 10 international financial centers likely to become more significant in the future. In the recent publication of the Global Financial Centres Index (GFCI 35), a renowned ranking that assesses the competitiveness and attractiveness of financial centers worldwide, launched on March 21, 2024, Kigali now ranks 67th globally while maintaining its position as the second in sub-Saharan Africa (SSA). Furthermore, Kigali ascended to sixth place in the Middle East and African region, right behind Dubai, Abu Dhabi, Casablanca, Tel Aviv, and Mauritius. In the fintech ranking, Kigali moved up by 18 places, to 62nd globally and second in Africa after Casablanca. Kigali’s ascent in the Global Financial Centres Index not only reflects its growing financial muscle but also underlines its commitment to innovation and development.

Rwanda has emerged as one of the prominent innovation hubs in Africa raising $38 million (Partech) of startup funding in 2023, a six-fold increase from 2022. This significant increase demonstrates Rwanda’s dedication to attracting venture capitalists and private equity in its dynamic innovation and entrepreneurial ecosystem to enable African startups access to funding from the continent.

The rise of Kigali as a leading financial hub for technology and digital transformation is also hinged on a proactive approach that involves implementing robust infrastructure, ensuring affordable and high-quality internet access nationwide, addressing regulatory hurdles, and establishing cutting-edge facilities. These initiatives continue to foster a conducive environment for tech startups and also strengthen Kigali’s positioning as a prominent hub for technology-driven businesses.

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Innovation hubs such as Westerwelle Startup Haus, Norrsken House Kigali, and KLab are natural entry points for investors to identify local startups and provide their international portfolio of companies with a proof-of-concept environment to test their innovations. The investment made by these innovation hubs in Rwanda has created a conducive landing pad for global startups.

One of the fastest-growing sectors in Rwanda is fintech. According to the latest Monetary Policy and Financial Stability Statements report by the National Bank of Rwanda (2024), transfers continued to grow during the period under review. The number of funds transfers via mobile payments surged by 57%, reaching 603 million, while their value increased by 49% to FRW 13,001 billion. Transfers through mobile banking saw a 28% volume increase (from 19 million to 24 million) and a 115% value increase (from FRW 2,347 billion to FRW 5,039 billion). Similarly, transfers via internet banking rose by 68% in volume (from 3 million to 5 million) and by 99% in value (from FRW 5,378 billion to FRW 10,697 billion).

Nick Barigye; image supplied

This significant growth led to the rise of fintech startups with an emergence of new subsectors such as insurtech where players like ZEP-RE are investing heavily in the sector, while the country drives to close on the Rwanda National Digital Payment System set to promote interoperability of the financial services in Rwanda. To support the growth of the industry, the National Bank of Rwanda also established a regulatory sandbox that enables fintech innovators to test their products and enable regulators and policymakers to adapt to the latest developments driving financial services innovation further. The sandbox is now receiving the sixth cohort of fintech companies with the regulatory sandbox regulations set by the National Bank of Rwanda.

Rwanda has also successfully attracted major players and funds such as Katapult, Virunga Fund, and more recently the Timbuktoo Africa Fund which will complement the Rwanda Innovation Fund’s efforts to foster the development of emerging startups through increased access to capital and technical support. Ultimately, the continuous development of the Kigali International Financial Centre has been a strategic move that is significantly contributing to investment growth, solidifying Kigali as a dominant destination for international finance.

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The symbiotic relationship between innovation and financial competitiveness has been and will continue to be instrumental in Rwanda’s global recognition and economic growth through fostering a dynamic business environment, talent attractiveness, and sustainable best practices such as green financing and financial investments. Worldwide, there is a rising effort to support young tech startups by offering attractive incentives and addressing regulatory challenges to foster an innovative atmosphere.

One of the pivotal factors considered in the Global Financial Centres Index is the Global Innovation Index (GII), which assesses innovation levels globally. In the latest GII publication by the World Intellectual Property Organization, Rwanda ranks ninth in SSA. In addition, Rwanda demonstrated outstanding global performance in key indicators; being ranked second in labor productivity growth, 11th in business-friendly policies, and 15th in the number of graduates in science and engineering. These ratings significantly demonstrate Rwanda’s willingness to invest in a conducive innovative environment for Africa and the world.

Ultimately, the continuous development of the Kigali International Financial Centre and Rwanda as an innovation hub is a strategic move that is significantly contributing to investment growth, solidifying Kigali as a dominant destination for international finance and a regional hub for innovation and talent attraction.

This strategic initiative aligns with Rwanda’s broader vision of becoming a preferred financial centre for international investment in Africa. Rwanda remains committed to creating an ecosystem that not only attracts global investments but also nurtures the creativity and potential of emerging African innovators.

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DISCLAIMER: Brand Voice is a paid program. Articles appearing in this section have been commercially supported.