Welcome to the Country of a ‘Thousand Hills and a Million Smiles’! – An Ideal Paradise for Pension and Financial Inclusion

Just Imagine: Imagine a country which has an impeccable system of identifying each and every individual by a uniquely designed and assigned number having two check digits, the National Identification Number. And, imagine if each of the individual’s National id is also linked to their individual bank account; overdraft and credit account through a well-designed and articulated real time credit bureau; Passport; Voter card, Social Security and Insurance that they buy; individual driving license; the registration number of the automobile that they possess; the SIM card of their Mobile phones and the likes. Also imagine, if each of these individual ids also possess their finger prints and thumb impression. And all of this resting and hosted at a Safe and Secured Central Location providing access to agencies such as banking, credit bureau, road authority and above all the Police (Internal Security). Imagine, Crime detection in almost real time since finger prints of all individuals are available with the Police that are linked to their mobile numbers and addresses.

Think About It: For civic amenities, the capital city possess no threat of traffic jams, people follow and obey traffic rules including sticking to their lanes and stopping at red lights. A wonderful combination of public transport of busses and two wheelers. This country has a uniquely designed water bodies including storm water disposition where one would not find any open drains, zero open water tanks, no foul smell of any drainage, a zero plastic / polythene country with well-located public toilets to respond to the nature’s call and no one spitting tobacco or beetle / pan on the roads, nor spoiling the beauty of the streets by any trash being piled up on the roads. No street dogs, no strayed animals, and no misbehaviour on the roads, women moving freely even at odd hours in the night and many stores open on a 24 hours basis. People are generally happy and fun loving with would be found stuck to their radios and songs and many even singing while walking on roads.

Governance: For governance, a huge commitment is seen amongst the politicians and civil servants alike. Again Imagine, where the Minister (portfolio hidden for identity sake) himself goes to the gym at 6.00 AM and still reaches his office at sharp 7.00 and where all the civil servants including senior and juniors reach the offices at 7.00 AM, the time when the government offices (7.00 AM to 5.00 PM) open and the bureaucrats start working diligently. Even the public start reaching the public offices for their work from 7.00 AM itself. Where the civil servants are smartly dressed in a tie and suit almost giving an impression of a dignified uniform. Where the senior civil servants drive their own vehicles without being driven as in a colonial environment and that their timing and commitment is of the highest order. A country where even the Wiki admits that the corruption is very low and hence governance high. A ticket is issued for exceeding the speed limit even at lesser known district headquarter with no cash dealings or nepotism.

Financial Inclusion: As an access to finance and credit this country has taken huge strides and provides gateway to finance to 76% of the population and only perhaps 1% population is deprived of any credit while 23% population does not require any credit.  By the way, the country is extremely Young with 78% below aged 35 and more than 50% population below the age of 19 and just a 3% population which has crossed their 60^th year of age.

Think about it, Again.

Is it not a Dream Country or a country known to us. Is it where you would like to live or migrate to? Is it a paradise for retiring into elderly lives? For nature lovers this country has lakes, mountains and jungles with rich flora and fauna. One of the lakes has a depth of 490 meters (Top 20 Deepest in world) and the Tourism attracts you with a ‘Country of Thousand Mountains and Million Smiles’ at an altitude ranging from 950 meters above sea level to 4800 meters above MSL. While one sizzles at 40 + Degrees in May in Delhi, this city provides respite at 18 Degrees in the month of May. It could be the developed world of the West like the German Capital or any European city, or even as clean as that of the Oriental Singapore or Hong Kong.

Well. U got me Wrong. This is neither in Europe, USA or Aussie. Not even Singapore of HK. This is Rwanda and the capital city of Kigali that I am talking about.

Scratch your grey matter. Kigali Airport??? Recall? Yes, the same airport where my childhood hero, the Phantom, the ghost who walks used to take his flights to the USA to meet his beloved Diana Palmer somewhere in California. But Rwanda is no more a home to Lee Falk’s Phantom or to the Wembessy tribe or Goran who used to guard his territory of the Skull Cave in the forest. It’s a reality. A reality that many nations would envy upon.

Coming back to this beautiful country and its magnificent people Rwanda has a knack for ‘Governance and Home-Grown Solutions’ and puts in place democratic, decentralized administrative structures, which are able to mobilize the population in order to implement Government programs and resolve problems.

Access to Finance: On the Financial Inclusion front, Access to Finance, Rwanda (AFR), aims at building institutional capacity of financial institutions to deliver products and services suited for the needs of the population and their enterprises. Other interventions include supporting financial education and improving policy coordination and dialogue within the financial sector and between the financial sector and the productive sectors. AFR supports several initiatives that lead to the strengthening of the banking and microfinance sector in Rwanda. It not only supports the Credit eference Bureau (CRB) and promotes MSME finance in Rwanda, but also promotes Financial Education in Rwanda. Rwanda has made solid progress towards the greater availability and usage of electronic payments which is shown by the increasing number of services, providers and financial touch points in the country. They could all be used as the ideal channels to promote an Informal sector contributory pension scheme, besides financial inclusion.

The institutionalization of some of it home grown solutions and traditions owes to at least two of its permanent foundations. Umuganda and SACCOs

Umuganda: In traditional Rwandan culture, members of the community would call upon their family, friends and neighbors to help them complete a difficult task. As part of efforts to reconstruct Rwanda and nurture a shared national identity, the Government of Rwanda drew on aspects of Rwandan culture and traditional practices to enrich and adapt its development programs to the country’s needs and context. The result is a set of Home Grown Solutions — culturally owned practices translated into sustainable development programs. One of these Home Grown Solutions is ‘Umuganda’, meaning thereby, ‘coming together in common purpose to achieve an outcome’. In Rwanda, there is a mandatory community service day from 8:00am to 11:00am, on the last Saturday of each month and this day is called umunsi w’umuganda, meaning “contribution made by the community” which is designed to be a day of contribution and building the country by citizens themselves. By law all able bodied persons above the age of 18 and below 65 are expected to participate in volunteer community work. The start of this practice goes back to colonial times and is still practiced today. Participation in Umuganda is usually supervised by a manager, or Umudugudu chairperson who oversees the effectiveness and efficiency of community participation. On this day, business activity halts, public transportation is limited, and people are seen everywhere working. People participate in cleaning streets, cutting grass and trimming bushes along roads, or repairing public facilities or building houses for vulnerable persons. People with particular skills offer their services for free on this day. For example, doctors may offer free medical examination. The benefits of Umuganda are not merely economic. The day is intended to build community involvement and strengthen cohesion between persons of different background and levels. One such a benefit is that people can access authorities to articulate their needs and voice opinions on various issues. Today close to 80% of Rwandans take part in monthly community work. Successful projects include the building of schools, medical centres and hydro electric plants as well as rehabilitating wetlands and creating highly productive agricultural plots. The value of Umuganda to the country’s development since 2007 has been estimated at more than US $60 million.

SACCO The second such institution is the SACCO – Savings and Credit Co-operative, a type of co-operative whose objective is to pool savings for the members and in turn provide them with credit facilities. SACCOs encourage thrift amongst the members and encourages them on the proper management of money and proper investments practices. Whereas in urban areas salary and wage earners have formed Urban SACC0s, in rural areas, farmers have formed Rural SACCOs. There are also traders, transport, jua-kali and community based SACCO’s. These are the primary institutions for financial inclusion in Rwanda.

To conclude my discussion, this is a tailor-made country for launching the micro pensions as we did in India in the last decade piloting with Sewa Bank, Ahmedabad and Rajasthan Vishwakarma where we faced huge road blocks and teething problems for lack of systems. While in Rwanda with a well-designed systems and equally well articulated processes a contributory pension as a part of financial inclusion and social protection can be seamlessly offered to young citizens who would exclusively save for their old age using the mobile money transfer, SACCO, AFR and the Umuganda etc. and avert an Old Age Crises right from the word go, which many well-to-do nations failed to do.

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Caveat: The description on this blog is purely based on my recent visit to this wonderful country and is not intended towards either highlighting or undermining any success or failure including any governance issues or systems, nor it is related to any government agency/ies or individuals.)