SMALL LOANS, BIG DREAMS: HOW SACCOs ARE CHANGING RWANDA'S FINANCIAL LANDSCAPE

What would you do if your entire financial future rested on a single, unpredictable harvest? For many Rwandans, particularly in rural areas, this question isn’t hypothetical. It’s a daily reality. For Grace, a farmer in the rolling hills of Musanze, the answer used to be “not much.” Limited access to financial tools meant she could only hope—hope that this season’s yield would be enough to cover her family’s needs. Then she joined her local Umurenge SACCO, and everything changed.

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Grace’s journey—from vulnerability to empowerment—reflects a broader story about Rwanda’s financial landscape. At Mirame, we’ve seen firsthand how small, community-driven financial institutions like SACCOs are not only helping people like Grace but are also key to the financial innovation that will shape Africa’s future. Our mission is ambitious: to build an Africa that is great to live in. And we believe financial inclusion is the foundation.

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The Humble Beginnings of SACCOs

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Savings and Credit Cooperative Organisations (SACCOs) might not grab headlines like fintech startups or cryptocurrency, but their impact is profound. Born out of a government initiative in 2008, Umurenge SACCOs were designed to bring financial services to every corner of Rwanda. The vision was simple yet transformative: establish a SACCO in each of the country’s 416 sectors, ensuring no Rwandan was left without access to basic financial tools.

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Today, SACCOs are the backbone of Rwanda’s financial inclusion strategy. With over 3.5 million active members, these cooperatives have made it possible for farmers, market traders, and small business owners to save, borrow, and invest in ways that were previously unimaginable. 

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The numbers tell part of the story: According to the FinScope 2024 survey, 96% of Rwandan adults are now financially included, with formal financial inclusion rising from 77% in 2020 to 92% in 2024. This remarkable progress has been driven by the widespread adoption of mobile money services, insurance, and pension products. But behind these statistics are millions of individual stories like Grace’s—stories of dignity restored and possibilities unlocked.

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The Role of SACCOs in Financial Inclusion

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Imagine you’re a farmer in rural Rwanda. Banks are scarce, and even if you could reach one, the paperwork and collateral requirements make loans inaccessible. Enter SACCOs. These cooperatives are rooted in the communities they serve, offering a level of trust and accessibility that larger financial institutions often can’t match. Members pool their savings, which are then used to provide loans to those who need them. It’s a model built on trust and mutual benefit.

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However, SACCOs aren’t just filling gaps left by traditional banks. They’re driving financial literacy, encouraging a culture of saving, and providing a platform for economic empowerment. For women in particular, SACCOs have been life-changing. Grace, for example, used her SACCO loan to invest in better farming equipment, which doubled her yield. With her increased income, she’s now able to send her children to school and even save for the future.

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Challenges and Opportunities

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SACCOs enjoy multiple advantages yet face specific challenges which need discussion. The major challenge is that many operate in low-connectivity areas, and this makes it difficult to integrate digital tools. Fraud and financial mismanagement is still an issue, and the question of how to sustainably scale up operations is often limited by the absence of technological infrastructure. Furthermore, there is a decrease in the number of credit active consumers which may point towards some constraints in the use of credit facilities. To this end, the solutions must be specific to the Rwandan context and the challenges that affect its people. This is where innovation becomes crucial. 

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At Mirame, we view these challenges as threats to be turned into benefits. We concentrate our efforts on how to improve financial systems with the help of data analytics and artificial intelligence to make them more inclusive and efficient. One of the most promising projects we have developed is a credit scoring system that, instead of relying on conventional data, uses information such as mobile phone usage and utility bill payments to evaluate credit risk. This approach is most helpful in populations that do not have readily available traditional financial histories.

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To see how SACCOs and innovation relate, we should go back to Grace. Prior to joining her SACCO, Grace was what the financial world calls “unbanked.” She did not have any credit references and her earnings were unpredictable. She was simply ‘off the books’ for banks.

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Through her SACCO, Grace was able to obtain a small loan for the purchase of fertilizer and seeds. But it didn’t stop there. Leveraging Mirame’s AI credit scoring, Grace's SACCO was able to look past her lack of formal financial records. They analyzed her mobile money transactions and utility bill payments, and determined she was a low-risk borrower. This enabled her to obtain a larger loan which she used to expand the variety of crops she grew. Grace now not only provides support for his family but also employs two residents of the neighbouring community.

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Such stories like Grace are not anomalies. They are proof that when we combine the grassroots reach of SACCOs with cutting-edge technology, the results can be transformative.

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Why SACCOs Are the Key to Financial Innovation

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So why focus on SACCOs when the world of fintech is thriving and the cashless system of mobile money is transforming everything? The reason is in their positioning in communities. A SACCO is not only a service provider but also acts as a centre of the community. This allows them to resolve issues related to financial inclusion better than what can be achieved through just technology.

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SACCOs are exceptionally positioned to spearhead the financial innovation agenda in Rwanda. Their member-centric approach along with the deep-rooted presence in communities makes them ideal partners for financial technology implementation. The digitalisation of SACCOs will improve their operational effectiveness, eliminate financial wastages, and enable them to meet more members' needs.

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Even though mobile payments have changed how people transact, they mostly fail at extending credit or saving products customised to the users’ different requirements. SACCOs specialise in those areas, and through associations with SACCOs, we can deploy more sophisticated financial technologies such as AI-based credit scoring systems to those who really need it. This is not meant to eradicate conventional financial systems. It is meant to improve them.

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In addition, government efforts to recapitalise and strengthen SACCOs demonstrate their importance in the country’s financial ecosystem. Savings and Credit Cooperative Organisations (SACCOs) are 116 in Rwanda, and these have been instrumental in building local communities’ confidence and increasing financial understanding.

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Building an Africa That Is Great to Live In

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At Mirame, we talk a lot about our vision of building an Africa that is great to live in. For us, financial inclusion isn’t just a box to tick; it’s the starting point for broader societal change. When people have access to financial tools, they can invest in education, healthcare, and businesses. They can plan for the future. They can dream.

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But inclusion alone isn’t enough. True transformation requires innovation. It requires looking at the challenges—low connectivity, lack of credit history, financial illiteracy—and finding creative solutions. SACCOs are a big part of that puzzle, but so are partnerships, technology, and a commitment to understanding the unique needs of African communities.

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The Road Ahead

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As we look to the future, there is huge potential for SACCOs to enhance financial innovation. Imagine a network of SACCOs seamlessly integrated with digital platforms, offering personalised financial products to millions of Rwandans. Imagine a farmer like Grace accessing not just loans but also crop insurance and market data, all through her SACCO. Imagine an Africa where financial exclusion is a thing of the past.

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That’s the future we’re working toward at Mirame. And it’s a future that begins with knowledge—knowledge of the people we serve, the communities they live in, and the systems they use. Because when we start there, the possibilities are endless.

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Building an Africa that is great to live in begins with empowering communities through financial inclusion.