Rwandan Senator Evode Uwizeyimana has expressed concerns over the high interest rates on loans offered by financial institutions in Rwanda. During a meeting between the Prime Minister and lawmakers on October 2, 2026, Senator Evode noted that interest rates on loans in Rwanda can be as high as 16%, compared to around 5% in other countries. He emphasized that this can make it difficult for borrowers to repay their loans.
Senator Evode also highlighted the issue of borrowers not being fully informed about the type of interest rate they are being charged. He noted that some borrowers may not understand the difference between a fixed interest rate (taux fixe) and a variable interest rate (taux variable), which can lead to them paying more than they expected. This lack of understanding can result in borrowers being surprised by the amount they still owe on their loans.
To illustrate this point, Senator Evode gave an example of a person who takes out a loan of 100 million Rwandan francs (Frw) and is told they have to repay a much larger amount than expected. He emphasized that this can be a problem for borrowers who are not aware of the terms and conditions of their loans. Senator Evode also noted that high interest rates on loans can make it difficult for investors and businesses in Rwanda to compete with those in other countries.
In response to Senator Evode's concerns, Prime Minister Dr. Justin Nsengiyumva acknowledged that the government is aware of the issue of high interest rates on loans. However, he noted that the government cannot dictate interest rates to banks, as they need to make a profit. Dr. Nsengiyumva explained that banks need to balance their need to make a profit with the need to provide affordable loans to borrowers.
Dr. Nsengiyumva also noted that the Rwandan financial market is limited, with few players providing loans. He cited the Rwanda Social Security Board (RSSB) as one of the main providers of funds for loans. The limited competition in the market can drive up interest rates, making loans more expensive for borrowers. Additionally, Dr. Nsengiyumva noted that some borrowers may not have a good credit history, making it harder for banks to assess their creditworthiness.
To address these issues, the government has implemented measures to improve the availability of credit information and to encourage more investment in Rwanda. The government has established a credit reference bureau (CRB) to provide information on borrowers' credit history. This will help banks to better assess the creditworthiness of borrowers and provide more affordable loans. The government is also encouraging investors to invest in Rwanda and provide loans at reasonable interest rates.
Furthermore, the government is promoting the use of electronic banking systems, such as EBM, to improve the availability of credit information and increase confidence in the financial system. Prime Minister Dr. Nsengiyumva emphasized the importance of promoting a culture of saving and investment in Rwanda, citing the Ejo Heza savings scheme as an example. He expressed optimism that these measures will help to increase the availability of credit and reduce interest rates on loans in Rwanda.
Key points
- High interest rates on loans in Rwanda can be as high as 16%, compared to around 5% in other countries.
- The government has implemented measures to improve the availability of credit information and encourage more investment in Rwanda.
- The limited competition in the Rwandan financial market can drive up interest rates, making loans more expensive for borrowers.
