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2.3 Million Rwandans Borrow From Kiosks

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Nyarutarama is Kigali’s most serene and luxurious suburb hosting the country’s high profile citizens.

High rise concrete perimeter walls prevent strangers’ eyes from peeping into homes but neighbours may only meet at Umuganda.

An outsider or non-resident of this part of Kigali may not believe that these high profile people also borrow from the neighbourhood kiosks for; sugar, bread, salt, food spices, irish potatoes, cooking oil, tooth paste, cigarettes and soap.

These super rich Rwandans send their house maids to these kiosks and the kiosk keeper pulls out a wrinkled musana exercise book, flips the pages and grabs a pen to write every item the maid requests for.

Some of these items can give a glimpse of how the Rwandan social welfare is one of the most daunting challenges the country faces.

Household income is inadequate for many including those considered or categorized as rich.

A DFID funded report, which government used as one of the references to develop an economic recovery plan for post-COVID-19, says 60% of the population has already depleted 100% of their income and now unable to put food on the table.

Kiosk attendants sometimes go several months without getting paid by these super-rich neighbours.

“I usually go to their workplaces with the exercise book containing items they borrowed so that they can pay me,” a kiosk operator told Taarifa on condition of anonymity.

In his book, the list of debtors are some of the highest-paid Rwandans, but keep dodging and sometimes giving him excuses that they haven’t been paid at work too.

For other poor neighbourhoods and across the country, borrowing from kiosks has become a norm and has caused coinage of a phrase “ntamugabo udafata ident” literally meaning [there is no man that doesn’t borrow].

According to the Finscope Rwanda 2020 survey released on Friday, May 29, a total of 2.3 million Rwandan adults used credit shop (i.e. took goods in advance from the shop and paid back later).

The same report says 2.8 million Rwandan adults also borrow money from these savings groups (overlaps possible).

While 3.9 million adults save through savings group.

The report also captures 4.2 million adults in Rwanda reported that they use informal groups such as Village Savings Loan Association.

Overview Of Quick Facts

There are around 7.1 million adults (16 years and older) in Rwanda.

The Rwandan adult population is largely rural-based, with 74% (5.2 million) residing in rural areas.

Around 30% of Rwandans are between the age group of 16 – 30 years. This makes Rwanda a young nation with around 60% of the three population younger than 31 years.

About 46% of the adults in Rwanda mainly generate an income from informal sector (including piece work, selling goods) as well as farming activities (29%) and only about 10% are employed in the formal sector.

Approximately 800,000 adult Rwandans own businesses, recording a 200, 000 growth from 2016. Around 53% of these businesses are registered.

The growth in the business owners and the formality of these businesses may indicate the attention given to developing the micro, small and medium business (MSMEs).

It is widely acknowledged that SMEs are significant contributors to job creation, development and economic growth.

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2 Comments

2 Comments

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    June 11, 2020 at 7:04 am

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    August 7, 2020 at 6:35 pm

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Business

Inkomoko Donates 500 Smartphones To Refugees For World Refugee Day Through #ConnectRwanda

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Timed with World Refugee Day, Inkomoko is fulfilling its #ConnectRwanda campaign pledge by donating 500 smartphones to entrepreneurs across Rwanda.

This weekend, as the world celebrates World Refugee Day on Sunday, June 20, Inkomoko is working with MTN Rwanda, the Ministry of ICT and Innovation, the Ministry in Charge of Emergency Management, and UNHCR to distribute the majority of the 500 phones to refugee and host community entrepreneurs, increasing their access to government services, financial products, and overall digital connectivity for their small businesses.

Initiated by MTN Rwanda, in partnership with the Ministry of ICT and Innovation, the #ConnectRwanda campaign was launched in December 2019, with the objective of providing smartphones to unconnected households across Rwanda to leverage the digital economy.

Since then, private companies, government institutions and individuals have come together to connect all Rwandans through technology.

Inkomoko’s phone donation, as part of World Refugee Day, aligned with their larger strategy to digitize services and provide increased access to finance for refugee and host community entrepreneurs.

These pivots have emerged as Inkomoko adapted to helping entrepreneurs adjust to new ways of working during COVID-19.

Phone distribution will launch in the Gihembe Refugee Camp where Inkomoko has been working since 2016. 

“During COVID-19, movement restrictions limited how we could provide services in refugee communities. Like most businesses, it forced us to quickly develop digital offerings that would work for our clients. Because we were able to make expedient digital implementations and because 39% of our Inkomoko staff are refugees themselves, we were able to continuously serve our entrepreneurs despite movement restrictions,” says Olive Ashimwe, Inkomoko’s Regional Director of Refugee Affairs.

The 500 donated smartphones fortify Inkomoko’s track record of financial inclusion, as Inkomoko is also rolling out a new digital loan app that will increase access to business financing for refugee and host communities.

This mobile loan app for smartphones is available in Kinyarwanda, English, French, and Swahili, and will help Inkomoko to diversify access points for financing across the country, a key request from entrepreneurs.

All of the phones donated by Inkomoko will come preloaded with their app.

Last year for World Refugee Day, Inkomoko partnered with the Mastercard Foundation to release US$2.6million in COVID-19 relief grants to more than 3,500 refugee and host community entrepreneurs.

One year later they have released data showing that as a result of their grants, businesses were able to generate more than US$10 million in new revenue and they employ more than 20,000 people throughout Rwanda. In addition, 98% of closed businesses have re-opened. 

“Inkomoko’s work with entrepreneurs has consistently shown that investing in refugee businesses is catalytic for economic development at-large. We are able to provide new growth opportunities for our clients in refugee communities by bringing new investments and digital solutions,” says Julienne Oyler, Inkomoko’s CEO.

Looking ahead, Inkomoko has pledged to support more refugee and host community entrepreneurs, including providing 25,000 refugee households with access to affordable capital in the coming years, all facilitated by more digital solutions.

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Business

5 Major Structural Reforms At RRA

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Rwanda Revenue Authority (RRA) has been undergoing structural reforms for the past ten years. Key focus on the reforms is digitising service delivery.

Implementation of electronic solutions leveraging on evolving technology has been very critical in ensuring the improvement of taxpayer service delivery and re-engineering RRA’s internal processes in a bid to build a strong revenue administration.

The Commissioner General of RRA, Pascal Bizimana Ruganintwali, spoke to Taarifa about the major reforms since 2010.

1. The electronic single window system in customs has been ranked among the best, worldwide, on matters to do with easy sharing of information among trade regulation stakeholders, faster clearance of traded goods, as well as improved transparency due to limited human interventions.

2. The Electronic Cargo Tracking System has significantly reduced the cost of doing business by eliminating the physical escort of cargo and the cost related to it. The number of days for importation from Mombasa to Kigali has reduced from 21 to 16, to a maximum of five (5) days today. The Electronic Cargo Tracking System has also contributed to efforts of fighting smuggling since it has eliminated the diversion of cargo.

3. The E-Tax system is a solution for electronic filling and electronic payment. Taxpayers can file their tax returns using their home/office computers/laptops regardless of their location. The system also accommodates other useful modules such as Audit and Refund Management, Debt Management that helps the tax administration in enforcement and tax arrears recovery, Motor vehicle management such as motor vehicle registration and ownership transfer, Tax Account and Registration/De-registration of taxpayers. The system has ushered in numerous benefits to the tax administration and to the taxpayers.

4. Electronic Billing Machine: Since the introduction of EBM in 2013, RRA witnessed an increase in VAT collections from Rwf110.5 billion in 2013 to Rwf450.7 billion in 2019 while VAT payables increased by 99.34 %. The system has also increased income tax collection and allowed the setup of controls to validate input and output provided that there was appropriate management of supply chain. Three years ago, RRA introduced the new improved version of the EBM which is more efficient and has eased tracking of transactions on the part of both RRA and taxpayers. The new internet based EBM which aimed at improving compliance and widening the tax base has addressed all the loopholes that existed in the older EBM.

5. Local Government Tax System has improved the management of Local Taxes declaration and payment. The system provide solutions from Registration of taxpayers, Declaration, Audit, enforcement and enables accurate reporting. For accurate and timely reporting on revenue Collection, the Tax Administration introduced SAGE X3.

All these reforms introduced in the last decade, Ruganintwali says, have significantly improved tax compliance, transparency in tax declaration and tax collection since taxpayers can pay precise taxes based on accurate income generated.

Technology in tax collection has ensured certainty in target setting and forecasting since it makes it easier to know what should be happening in the near future.

What are the innovations coming up soon?

He says new operating model currently under implementation intends to become a more data centric tax body that collects as much as possible in terms of revenue and also facilitates taxpayers systematically through electronic systems.

“We are designing new mechanisms leveraging on technology to develop solutions that will ensure high level of compliance among taxpayers through accurate declarations across all tax-heads. Among them, include my RRA project, a solution that will gather all taxpayers’ information in one place. Taxpayers could log into their accounts and have all the information they need to know with less efforts and time. Other projects include the enhancement of electronic Cargo tracking among others.

“Strengthening the institutional capacity (structural review and capacity building of workforce) will remain among our top priorities,” he notes.

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Business

Cimerwa Records Rwf30billion Worth Of Revenue

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Rwanda’s largest cement manufacturer CIMERWA Plc has reported a major growth in its revenue in the first quarter of 2021.

The company said on Friday, it fetched Rwf 30 billion worth of revenue indicating a 14% increase as compared to the same period last year.

According to John Bugunya, the Chief Finance Officer (CFO), the company was able to stage a stronger performance despite the devastating effects of Covid-19 pandemic.

“Our position in the first half of the year paints an encouraging picture of what our financials will look like at the end of 2021. Despite the effects of the lockdown that went into effect during the first quarter of this year, we were able to record strong revenue and profit and maintain a healthy cash balance of Rwf 8.7 billion. This speaks volumes on our resilience in the face of difficulties and challenges,” said Bugunya.

Details also indicate that Cimerwa also recorded a Rwf 1.02 billion decrease in cost of sales which was buoyed by efficiencies in plant operations and prudent cost-saving measures.

Meanwhile, Albert Sigei – Cimerwa Plc CEO said the domestic market continues to show a good growth trajectory driven by infrastructure investments across the country while the export market also grew during the period.

“Amidst this wave of growth, our market position remains strong and steady and we are gearing up to make it even more robust,” he said.

Sigei further noted that the noticeable increase in company inventories is a deliberate and strategic move to ensure that it is ready and able to supply the market with cement while maintaining support for the government’s infrastructure development agenda as a proud ‘made in Rwanda’ company.

As part of measures aimed at preventing further spread of Covid-19, the company has vaccinated about 200 staff and adheres to Standard Operating Procedures.

“Our good results during this period demonstrates Cimerwa’s ability to ride the wave of challenges that were brought on by the COVID-19 pandemic. This however is a collaborative effort that starts from the exceptionally skilled pool of people who work for this company, a competent and devoted board of directors and our supportive stakeholders. All of this puts us in a position to keep delivering on the promise we made to our customers, our shareholders and the country at large,” Sigei said.

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