United Nations Capital Development Fund (UNCDF) introduced its Expanding Financial Access and Digital and Financial Literacy (REFAD) program in 2019 with the aim of supporting a resilient and sustainable local economic development, through empowering the demand and supply sides of Rwanda’s financial sector ecosystem. The REFAD model focuses on digital financial education in order to create affordable and convenient financial services. As a result, this will aid Rwanda’s rural and refugee communities to make sound financial decisions and increase household incomes.

REFEAD also focuses on the supply side of financial services by helping design client-centric financial products, by providing technical assistance and capacity building to UNCDF community partners. This provides sufficient training and tools to develop, test, and initiate innovative financial products that are specifically catering for low-income Rwanda populations.

Using four programme implementation partners, REFEAD have been able to expand and dispatch agents in the target areas to help improve the usage of digital finance starting with saving groups. One of the partners is Inkomoko, a social enterprise focusing on business and entrepreneurship services, supporting REFEAD by holding in-person meetings to savings groups on how to interact with a group savings mobile application. The application, known as Save, allows individuals in rural areas to transact without having to travel to meet in-person. From 200 saving groups, 100 groups have registered on Save. Meanwhile, 300 individuals were also educated on designing viable business ideas and managing micro-finance start-ups. Many communities are able to build upon the knowledge to utilise their savings and loans associations (VSLAs) towards becoming profit-bearing and sustainable organisations.

Another partner is Umutanguha Finance Company (UFC), a traditional banking business, alongside providing digital financial education. With the support of UNCDF, UFC has been able to offer customer-centric financial products with the addition of digital services and informing uneducated localities about financial literacy. This improved usage of financial products includes 350 new loans offered to small entrepreneurs, and 1500 UFC clients in refugee settlements and nearby communities, receiving financial education focusing on saving, loan management and digital banking.

1. UNCDF through their REFEAD program highlights the importance of focusing on both the supply and demand side in offering financial products within refugee and rural communities in developing countries such as Rwanda.
2. Initiating and incentivising businesses to cater financial products specifically for disadvantaged individuals within communities, while also educating the locals about taking leadership in their personal and community financial management, can result in a successful match between what rural and refugee communities groups are seeking and what is offered in the market.
3. REFEAD project activities demonstrate the importance of having rules and governance during community meetings about finance. Their experience has been that it allows for better management of funds and discussions about finance and therefore a greater improvement in the mindset towards the importance of savings.
4. Education about financial management is the most important offering required before the sale of financial products as it allows individuals to be better equipped to make financial decisions.
   
5. Financial companies also benefit from educating customers as clients are less likely to default on their loans while also continuing more long-term relationships. This in turn allows for increased profitability and growth of micro-financing within rural and refugee communities.
6. Utilising digital financial products are highly effective to reach a greater customer range and make it easier for transactions to occur. Customising such digital products in line with the capabilities of rural and uneducated communities will improve usage rates and higher satisfaction in their banking experience.
7. Digital products can include educational materials to allow facilitators and customers to improve their understanding of savings, loan management and micro-business opportunities.
8. REFEAD is a great example of exploring financial products through the community as a whole rather than focusing on individual customers. Working on whole communities increases the chance of mindset changes about savings and investment and may also be less costly to work with.
9. Having community and implementation partners are an effective strategy to break into rural and refugee communities when businesses lack cultural understanding about specific region's values and beliefs. REFEAD successfully utilised four implementation partners that were present within Rwanda to reach their target groups. Such partners can include social enterprises to local businesses that the community are comfortable working with and reaching out.