How Rwanda is Pushing to Become Africa’s Fintech Hub

A Small landlocked nation in East Africa, Rwanda is making significant strides towards establishing itself as Africa’s fintech hub. With a vision to leverage technology and innovation for economic growth, the Rwandan government, in collaboration with various stakeholders, has taken proactive measures to foster the development of the fintech sector. 

Rwanda is a rising innovation hub, drawing technology companies and manufacturers from around the world to set up innovation hubs and state-of-the-art manufacturing plants in the country.  For instance, Andela which originally launched in Nigeria announced a pan-African tech hub set to launch in Kigali, Rwanda. Also Nigeria innovation lab, CcHub launched a new design in Rwanda as well as car maker Volkswagen a manufacturing plant in Kigali, which is the first in the county.

Rwanda is currently witnessing the expansion of two major fintech players from Africa. This includes Chippercash launching a few weeks and Flutterwave’s opening two months before. This explains how fast the country is turning into a preferred location for technology and innovation. Let’s take a look at how the country became a safe haven for African fintech hubs.

Its new policy on fintech

Rwanda introduced a comprehensive fintech policy for 2022-2027, aiming to establish itself as a regional financial centre and drive economic and social transformation through digital innovation and improved financial inclusion. Having recognized the growing influence of fintech in Africa, Rwanda is determined to capitalise on this trend and establish itself as a prominent global financial hub.

A key objective of the policy is to position Rwanda as a regional financial centre by attracting investments and fostering the availability of essential technology and financial services as well as a favourable business environment, central location, commitment to digitalization, and well-developed infrastructure make it an ideal destination for fintech innovation.

Aside from that, Rwanda aims to become Africa’s “proof of concept country,” allowing startups to test their services before expanding to other markets. To support fintech companies, Rwanda has streamlined its licensing process, lowered the corporate income tax rate for fintechs to 15% (compared to the 28% in other sectors), and exempted them from the 15% withholding tax on dividends.

The establishment of KIFC

As part of its commitment to building a prosperous future for its people, Rwanda established the Kigali International Financial Centre (KIFC) to solidify its position as a crucial business and financial hub in Africa. The government envisions the KIFC as a catalyst for transforming the investment landscape throughout Africa. 

Despite being just three years old, Kigali’s International Financial Centre, launched in early 2020, has made significant strides in implementing regulatory reforms, establishing new laws, forging partnerships, and garnering attention from various stakeholders. Its swift progress has not gone unnoticed.

The chief investment officer for KIFC, Jean-Marie Kananura, said that the government approved 19 laws designed to ease business and attract firms. He said “In the last 3 years, Rwanda’s government approved 19 laws designed to ease business and make the country an attractive destination for firms that want firm legal and governance frameworks for their African operations.” 

Rwanda’s ambitious and ready market

One crucial aspect contributing to Rwanda’s push to become Africa’s fintech hub is its ambitious and ready market. Despite being a small country with over 13 million people and a $10 billion GDP which is considerably smaller than sub Saharan Africa’s main economies like Nigeria, South Africa, Kenya, amongst others. 

The East African country has demonstrated a remarkable appetite for digital innovation and financial services with responsive government partners, and safe surroundings. High mobile phone penetration and a tech-savvy youth population also create opportunities for fintech startups to cater to specific market needs. 

Visionary leadership

When observing Rwanda’s remarkable ascent as a prominent technology hub, it becomes evident that President Kagame’s Vision 2020 has played a significant role. Launched in 2000, the program aimed to shift Rwanda from an agrarian economy to a knowledge-based, middle-income economy. 

The program encompasses six pillars and three cross-cutting areas, emphasising the government’s commitment to fostering inclusive and skilled human capital, vibrant private sector growth, gender equality, and technology advancement. It sees through  Rwanda’s dedication to building a talent pool that is both inclusive and equipped with the necessary skills, as well as promoting entrepreneurship within the country.

Investment in infrastructure

Rwanda has made significant investments in building robust digital infrastructure. This is one thing innovators and technology entrepreneurs often look out for and see as a significant challenge.

Through the Rwanda Utilities Regulatory Authority (RURA), a body that oversees factors that disrupt technologies such as payment gateways and transport initiatives have completed a 2,300-kilometre fibre-optic cable network. This achievement connects the country to the global community, ensuring fast and reliable internet access, and enabling a broader range of broadband services to benefit the population.

Demonstrating its dedication to digital infrastructure development, Rwanda entered into a partnership with Africa50 in late 2018 to jointly construct the Kigali Innovation City, a remarkable project with an estimated cost of $2 billion.