Building Borderless Finance from Rwanda to the World | The CXO Conversations

Guest: Jean-Marie Kananura, Chief Investment Officer, Rwanda Finance Limited

Host: Kwame Oppong, Director of FinTech and Innovation, Bank of Ghana

Full Transcript

[00:00:00] Kwame Oppong: Hello everyone. Welcome to the CEXO conversations. My name is Kwame Oppong, director of FinTech and Innovation at Bank of Ghana. Today, I have a special guest, Jean-Marie, Chief Investment Officer at Rwanda Finance Limited. Welcome Jean-Marie.

[00:00:20] Jean-Marie Kananura: Thank you.

[00:00:20] Kwame Oppong: So before we start, perhaps the biggest news this week. The US election. Any quick reaction to that?

[00:00:29] Jean-Marie Kananura: Of course, I've been following as everyone. Wish them good luck. They have made, their clear choice and wish them good luck. Hopefully, the transition will be smoother than the one four years ago.

[00:00:40] Kwame Oppong: I have had all kinds of responses to it. Most people here at a FinTech festival are from different parts of the world. So we are experiencing and connecting to it differently. It reminds me of the conversations two election cycles ago about AI and the role it played.

Interestingly, haven't heard anything of that nature this year. It is still a big subject. And I think you heard from the stages here. The role of AI going forward. How do you think AI is gonna shape business and society beyond what we currently see?

[00:01:10] Jean-Marie Kananura: We start by talking about what is happening, currently in Rwanda, but also in the region, right? We have seen AI playing a big role in bringing, underserved population into the financial sector, right? We see AI powered solution providing interesting solutions to those people.

We have seen more solution in terms of money transfer. Recently in Rwanda, we were talking with a company that is providing solutions to savings group, right? A digital savings group, right? That this is quite popular, in Africa. But how do you use this type of tools to increase the efficiency, but also to deploy it into a larger group?

It has been playing a very big role. In terms of financial inclusion in Rwanda, we are talking about 94%. Five and ten years ago, it was around 85%. So within five years, it has really increased a lot now going forward, I think, from our perspective, the National Financial Center. We are attracting more investors coming from all over the world to set up in Kigali but also to deploy capital across the continent. One important element is compliance.

AI is going to play a big role in onboarding new clients and investors. KYC and due diligence becomes very important when it comes to transactions. If there is any suspicious transactions. I think with AI tools, it's becoming easier to detect and mitigate fraud risk which at the end of the day increases our profile in terms of rating so that we can be integrated in the global financial market.

I think compliance is a big component where AI can play a big role.

[00:02:49] Kwame Oppong: Fascinating points. I know Kigali, Finance has been active in trying to attract investments and players into this space. It is a global world and they are finding a great home which is a good thing for the continent overall.

[00:03:02] Jean-Marie Kananura: Absolutely.

[00:03:03] Kwame Oppong: It has an impact on labor. Now it is possible to work from anywhere. How do you think all this is going to affect labor? Particularly, maybe you can look at it from the context of, 'Is hybrid going to be a long term feature?'

[00:03:19] Jean-Marie Kananura: I think it is happening. During COVID, Rwanda took strong measure to contain the pandemic. People started working from home, reducing the need for movement.

It has been proven to work because the productivity was not impacted I think it is going to continue that way. We want to attract more talent. We are very open to attract Africans and even beyond Africans that have talent, we might miss in the market. For us it is flexible. If someone can walk from his home country from time to time and travel to Rwanda. This will attract global talent. Emerging markets will help develop the financial sector in general.

[00:03:57] Kwame Oppong: The issue of talent mobility, cooperation among countries, the policies that enable this is all going to be subjected to global geopolitical dynamics. There is certainly going to be an impact. On talent availability and mobility. How do you think businesses will be impacted by that?

[00:04:14] Jean-Marie Kananura: Talking from the regional perspective, I think we need to build more resilient economies, right?

So you have seen our economies being impacted by COVID and then the war between Russia and Ukraine. We should draw lessons and empower regional blocks. We talking from Africa perspective again. We have an east African community. We have a west African community. But how do we continue to empower those regional blocks?

To increase cooperation between those blocks. Interest rate between African country is around 17%. In Asia, we are talking about almost 60%. If we want to be more resilient going forward, we need to increase interest rate and collaborate more.

The Africa Free Trade Agreement is one. It is the biggest initiative that have been taken by the continent in the last hundred years maybe. Must be implemented well. And I think it can address these issues and open up our borders.

Not only open for goods but also mobility, right? Rwanda has always been opened. There's no visa required for Africans since 2017. Even for people from Commonwealth or Francophone, there's no visa required. That means almost a hundred plus passport that can come.

We also want to do the same for talent. There is a list of talent that we are missing in the market. And we are very open to any company that wants to set up but also bring those talents. They have work permit within one or two days.

This is something we are trying to do to address those challenges. But I think something should be done at the continuity level.

[00:05:47] Kwame Oppong: These are things one country cannot handle alone. Hopefully, these efforts that are ongoing, would yield outcomes quicker.

As you engage more stakeholders, you realise there's some impatience. And reasonably so.

[00:05:59] Jean-Marie Kananura: Something we are trying to work on is, in the context of FinTech now, licensing processes in the continent, not the most efficient.

[00:06:05] Kwame Oppong: Yeah.

[00:06:08] Jean-Marie Kananura: How do we facilitate between regulators? Establish partnership so that a FinTech that is regulated in Zambia is allowed to operate in Rwanda because we have harmonise our licensing process to allow FinTechs, even innovators to scale on the continent.

We cannot support the innovators if we have this type of restriction which could be removed, if we have political will. This is something that we want to do. We have initiated negotiation with different countries beyond the continent. We want to have this type of licensing passport with countries such as Ghana, Zambia and with countries like Qatar. The idea is to remove those restriction and to open the market to the founders and innovators.

[00:06:58] Kwame Oppong: That is some really great work that you are doing. I think as you sustain that momentum, it's hopefully going to spread across the region and others would learn from that best practice.

I have a question. We are looking to support these founders. We're looking to help them establish businesses. They are delivering all these businesses that are digital in nature. As a financial sector, we have to ensure that the beneficiaries of the services that are delivered have trust in the institutions.

What are your thoughts? About how businesses can ensure trust, particularly when it comes to customer data on the continent. How can it be addressed? Customer data and cybersecurity. How can these be addressed in a way that gives people the confidence to not just be aware of products being available, but actually adopt them and utilise them long term?

[00:07:49] Jean-Marie Kananura: First step is to have the right policy and regulation. In Rwanda, as we are developing the financial center, it is very important to have data protection policy. We have enacted data protection law that sets requirement and guidance on how to collect, process and store data.

More institutions are required by law to have data protection managers. They have to have policy. So this is something that you need to be monitored, going forward. And, cybersecurity, of course. It is something countries have to work on and the sooner the better because we have seen banks being hacked. How do we work together to address this?

We even have a cybersecurity agency in Rwanda that is working with stakeholders, including banks and financial institutions, to make sure that we have strong measures to protect data and combat cybersecurity attacks.

[00:08:44] Kwame Oppong: Fascinating thoughts. A big thank you, Jean-Marie.

[00:08:47] Jean-Marie Kananura: Thank you very much.

[00:08:48] Kwame Oppong: Been a good conversation. Hope to have you back next year.