This initiative aims to support innovation in financial services while ensuring careful regulation to prevent potential risks.
CMA notes that, given the rapid pace of technological advancements globally, the financial sector in Rwanda stands to benefit immensely from these innovations. However, the Authority warns that without proper regulation, such technology could bring about unforeseen challenges.
Jerome Ndayambaje, a specialist in technology and innovation at CMA, spoke about the potential for the market to evolve over the next five years, driven by Fintech developments.
He highlighted how innovations could improve the efficiency of financial services, speed up processes, and extend access to a broader audience.
Key issues under discussion include whether Fintech can foster a savings culture, simplify investment processes, and facilitate easier access to financial products in the capital markets. More so, there's a question of whether these technologies can assist the private sector and government in raising capital for business expansion.
The 'Fintech Regulatory Sandbox' is designed to help in trial financial technologies with a small group of users over a set period (usually one year) to assess their viability and impact before scaling them up.
Ndayambaje explained that this testing phase ensures that emerging technologies address existing challenges and do not cause harm to investors or the financial market.
By offering a controlled environment for experimentation, the sandbox helps in understanding the operational dynamics, benefits, and risks of new technologies. Successful innovations that demonstrate value and mitigate risks are then granted permission to operate within the broader market.
The CMA introduced this program in 2023 to provide a platform for companies in the financial technology sector to test their innovations and services, fostering Rwanda's goal of becoming a hub for financial technology and investment.
Ndayambaje stated that this initiative aligns with Rwanda's ambition to become a leading center for both investment and financial technology in the region.
The sandbox also serves as a platform for technology companies to expand both within Rwanda and internationally, offering a conducive environment for growth. It helps establish a culture of saving and investing, enhances service delivery, and ensures broader access to financial products for all Rwandans.
However, challenges were noted by participants in the sandbox, particularly in integrating their technologies with those of various stakeholders in the financial sector.
CMA considers these challenges manageable through continued awareness campaigns and collaboration with key partners during the testing phase.
The 'Fintech Regulatory Sandbox' is a critical step toward modernizing Rwanda's financial market, improving access to capital, and facilitating financial inclusion across the country.
IGIHE
