Low financial literacy has been a persistent challenge in Rwanda and has often been blamed for issues such as low savings and poor investment decisions. However a group of young people have teamed up to seek a lasting solution to the challenge.
Having conducted research and found out that there is still a lot of financial illiteracy especially among the youth, Richard Rubayita formed a savings group known as College Association Rwanda-CAR last year. The savings group based in Kicukiro aims at enabling students to save and be trained on financial education.
He spoke to Business Times’ Joan Mbabazi on the concept.
What was the purpose you intended when setting up the savings group?
My purpose while starting up this group was to establish an entrepreneurial mindset among young adults and fellow college students. The group was formed when I was still at University, with the purpose to empower them to start up their own businesses and learn how to save.
What does College Association Rwanda really do? And how does it work?
The group motivates and inspires jobless people to become self-reliant, provide members a secure place to save, the opportunity to borrow in small amounts and on flexible terms, and affordable basic insurance services.
Members meet frequently to save; the amounts are based on each member’s ability. We give out loans at an interest rate, which in turn grows the loan fund. Member’s savings and loans are recorded by the finance team.
The membership fee is Rwf 10,000. We are so far 35 members in the group. Each member saves Rwf 1,500 per week. If a member borrows money from the group, they must pay it back within two months with an interest of 11 per cent. Failure to pay back the loan within the agreed period, a member pays a fine of Rwf 200 per week.
What has enabled your group to be active and beneficial?
For any savings group to be successful, there are various traits that the group should have. We have a common bond, clear objectives, each member before joining the group agrees upon rules to follow; we are honest and work hard to achieve our objectives. We also hold regular meetings and participate in discussions and decision-making. Members demonstrate leadership and keep accurate records of the activities and meetings.
How many people have benefited from this group?
So far 34 have benefited from the group through loan accessibility and boosting up their savings spirit.
Tell us some of the achievements of this group.
Members of the savings group have learnt teamwork, leadership skills, saving the culture, and the more people get the loan, the more the group acquires interests. Members have been able to start up their own businesses and employed other people, thus reducing on the rate of unemployment.
What challenges have you encountered so far?
We are still seeking for supports to reach the group’s target as early as possible.
The group also lacks some facilitation to reach out to colleges while implementing this culture and also the mobilization at the University level for easy implementation.
I am also looking forward to a time when financial institutions that can fill this market gap once the groups are well established in these partner Universities.
Where do you see this group in the years to come?
We want to motivate the Rwandan college students about having an entrepreneurial mindset and investing their money.
As a group, we agreed on investing our money is something profitable. We have started buying land from our savings and selling it with an interest. Our vision is starting to construct apartments for rentals when we get financially stable.
This idea came about after discussing as members on how we could bring change in social aspects, the standards of the nation and we also looked at the business that can boost our financial status.