Digital Financial Innovative Products and Financial Inclusion in Rwanda

International Journal of Economics and Management Studies

© 2022 by SSRG - IJEMS Journal

Volume 9 Issue 11

Year of Publication : 2022

Authors : William Rwiririza

10.14445/23939125/IJEMS-V9I11P104

How to Cite?

William Rwiririza, "Digital Financial Innovative Products and Financial Inclusion in Rwanda," SSRG International Journal of Economics and Management Studies, vol. 9,  no. 11, pp. 27-35, 2022. Crossref, https://doi.org/10.14445/23939125/IJEMS-V9I11P104

Abstract:

The principal aim of the study was to explore the digital financial innovative products and financial inclusion in Rwanda from 2010 to 2020. The theories related to financial innovation and inclusion have been explained, such as the Technological Acceptance Model (TAM), Diffusion Innovation Theory (DIT) and Financial Innovation Model. The quantitative methods were used in this study as it involves the time series data. The study used ARDL as an econometrics technique due to the mixed results of the unit root test. The ARDL Cointegration test revealed the existence of the long-run relationship among the variables. The value of R-squared in ARDL ECM was .73, implying that independent variables could explain 73.0% of the financial inclusion in Rwanda. Some diagnostic tests were conducted, such as multicollinearity and normality tests, to ensure the model's correctness. The results indicated that all the independent variables (Mobile banking transactions, Personal remittances received, Automated teller machines (ATMs) (per 100,000 adults), and Internet banking transactions) have a significant positive effect on financial inclusion). So, the study concluded that innovative digital financial products positively impact financial inclusion in Rwanda. Due to this reason, some recommendations were provided to the government of Rwanda for improvement in financial inclusion in Rwanda. Some recommendations included allocating more resources for digital financial innovations and improvement of already existing channels of e-banking and platforms and infrastructures, initiating some rules and regulations which should promote financial innovation adoption as it boosts financial inclusion, to multiply campaigns for the acceptability of e-banking within the population and adopt some reforms, policies and programs that could accelerate the use of the internet, POS, ATMs especially in rural areas and for illiterate people.

Keywords:

Financial institutions, Innovative products and financial inclusion.

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