Financial Inclusion of Urban Street Vendors in Kigali

We study street vendors in the Nyarugenge District (Kigali, Rwanda) during field research (July to August 2017) using a multimethod approach including field observation, a survey and background interviews. The survey tests assumptions by policymakers about the determinants of financial inclusion of informal sector workers in order to strengthen the evidence base for Rwandan policies aimed at financial inclusion of the informal sector. An ordered probit analysis supports the importance of gender for both de facto bank account use of self-employed in the informal sector. From a policy perspective it is relevant that key actors during background interviews have indicated that they believe that individual characteristics such as gender are not important for the formal decision to accept an individual as an account holder at a financial institution (de jure financial inclusion), but that this is contradicted by the fact that gender is a statistically significant determinant of frequency of use (de facto financial inclusion). The presence of a financial institution in the home location of the street vendor is the most significant determinant identified by our research. From a policy perspective this underlines the importance of good financial infrastructure: the geography of financial inclusion is important as has been established by earlier research on the differences between urban and rural areas, but our results show that the driver is the availability of a financial institution in the street vendor’s hometown, thus providing policymakers with a tool to improve financial inclusion in Rwanda.