In the second quarter of 2024, Rwandan consumers displayed impressive financial resilience, with a majority expressing increased optimism regarding their income prospects for the upcoming year, according to a new report by TransUnion Rwanda.
The report from the credit reference bureau revealed that 33% of surveyed consumers reported higher incomes from April to June, while 22% embarked on new business ventures and 21% secured new jobs, leading to additional income.
Sam Tayengwa, CEO of TransUnion Rwanda, noted, “Rwandan consumers are demonstrating remarkable resilience in the face of financial challenges.”
The inaugural report, which examines shifts in consumer behaviors and attitudes related to income, debt, and identity theft, attributes this resilience to improved employment opportunities within the country.
The latest Labour Force survey conducted by the National Institute of Statistics of Rwanda (NISR) has revealed that the country’s unemployment rate has returned to pre-COVID-19 levels after the addition of 562,000 jobs in the first quarter of 2024. This translates to an unemployment rate of 12.9% during the same period, nearly matching the pre-pandemic estimate of 13.1%, indicating that approximately one out of every eight individuals in the labor force were unemployed.
TransUnion also highlighted a positive trend, noting that 81% of Rwandans are optimistic about their income prospects for the upcoming year (2025).
Sam Tayengwa, commenting on the findings, remarked, “The optimism displayed by consumers about their future income and their proactive financial management strategies is highly encouraging.”
positive outlooks
A reduction in inflation, resulting in decreased commodity prices from their peak in 2023, is anticipated to alleviate financial strain on consumers and support household spending in the latter half of 2024.
TransUnion reported that consumers in the last quarter demonstrated cautious spending behaviors, with many prioritizing futures financial stability, such as focusing on debt repayments. The report noted that 28% of respondents actively increased contributions to emergency funds during the reviewed period.
Similarly, 49% of surveyed consumers indicated plans to allocate more of their income towards bills and loans moving forward, indicating a growing trend towards responsible financial management.
However, the report also highlighted decreased income prospects among certain consumers, with 25% experiencing income reductions during the reviewed period. Job losses were reported by 28% of respondents, while 18% faced salary cuts, impacting their ability to meet monthly financial obligations.
Concerns about meeting current financial commitments were expressed by 42% of respondents, particularly prevalent among millennials aged 27-42, who comprised 44% of those worried about bill payments.
Among consumers unable to fully meet their financial obligations, 37% plan to seek assistance from friends or family, 35% intend to make partial payments, and 33% will draw from savings to cover shortfalls.
Credit is crucial in maintaining financial resilience
Consumers widely acknowledge that access to credit is essential for achieving financial resilience. A significant 98% of survey respondents emphasized the critical role of credit in meeting their financial goals.
The report indicated that 37% of consumers, especially millennials (42%), believe they have sufficient access to credit and various lending products.
In the second quarter of 2024, 51% of consumers planned to pursue new credit opportunities, with millennials showing the highest interest at 60%.
However, among the 49% who decided against seeking new credit or refinancing during the quarter, 27% cited concerns about high costs and uncertainties related to income and job stability.
Of those intending to seek credit, 44% were considering new personal loans, 38% were contemplating student loans, and 17% were planning to apply for new home loans.