Role of Financial Inclusion in Promoting Investment and Living Conditions in Rwanda: A Case Study of the National Council of Persons with Disabilities in Kigali City

Access to finance especially to the poor is essential for promoting inclusive economic growth and eradicating poverty in the country. Rwandas Economic Development and Poverty Reduction Strategy (EDPRS-2) recognizes that socioeconomic opportunities and development will be undermined if expanded financial services are not available, especially to the poor and other disadvantaged groups who are deprived of access to these services. Evidently, an inclusive financial system creates employment opportunities, ensures economic and financial stability through reducing vulnerability and contributes to poverty reduction. The main objective of this study was to analyze the role of financial inclusion in promoting investment and living conditions in Rwanda. Specifically, it analyzed the extent of financial inclusion of NCPD members, determined the factors associated with the financial exclusion of NCPD members, and assessed the relationship between financial exclusion, investment and living conditions of the NCPD members. The study findings are useful for the NCPDs management, scholars and practitioners. It was a cross-sectional study using both qualitative and quantitative research design methods. The questionnaire and interviews were used for data collection from 196 respondents and Focus Group Discussions of 7 household heads. For validity and reliability of research instruments, a pilot study was conducted at the National Union of the Disability Organizations of Rwanda. The content consistency of instruments was assessed by experienced researchers. Statistical Package for Social Sciences (SPSS) software and descriptive statistics were employed for data analysis. The study found that 174 (89 %) respondents did not have access to financial services, while 22 (11 %) had access to financial services. To compensate the lack of funds from financial institutions, the NCPD in Rwanda allocated some funds to PWDs cooperatives to be invested mostly in farming (52.06 %), commerce (13.26 %) and tailoring (12.72 %) while minor amounts were allocated in other micro-projects (21.41 %) due to the lack of funds. Despite the allocation of financial assistance, PWDs do not have accessibility to formal financial services in order to improve their living conditions. Barriers to financial services included communication, hearing, and sight barriers (97.96 %), lack of training, skills and capacity (95.92 %), lack of previous experience (85.20 %), lack of access to various opportunities (65.61 %), unemployment and lack of income (98.98 %), and inaccessibility to offices (48.98 %). In addition, the study found that the NCPDs financial assistance did not contribute sufficiently to job creation (43 %), income generation (47 %), access to education (45 %), access to health facilities (46 %), settlement improvement (41 %), and nutrition improvement (39 %) due to its insufficiency. Only 13 (6.63 %) respondents created from 1 to 10 jobs, 4 (2.04 %) created from 10 to 20 jobs, and 3 (1.53 %) created from 20 and more jobs. The study concluded that NCPDs financial assistance is significant in contributing to the socio-economic development of PWDs cooperatives in Rwanda. It recommended significant efforts to build inclusive financial systems in Rwanda, to provide training to the disabled people for developing their skills to be involved in any economic activities, and to look for enough grants from NGOs and other organisations that seek to improve the wellbeing of persons with disabilities.