Saving – Financial Awareness (Senior 1 Entrepreneurship) | Ganzaa

Financial Awareness

Lessons

Senior 1 · Entrepreneurship

Financial Awareness

5 lessons

Lesson 3 of 5

Saving

25 min

Case: twenty traders and a metal box

Twenty women who sell vegetables at a market in Muhanga meet every Monday after the market closes. Each puts Frw 2,000 into the group's locked metal box, and the treasurer writes it in the book while everyone watches. When a member needs money for stock or a sick child, she can borrow from the box and repays with a small charge. At the end of the year the box is opened and everything is shared out.

A group like this is called an ikimina (plural ibimina). None of the women could save Frw 104,000 alone, she says, "because the money in my pocket always finds a reason to leave". (An illustrative case.)

Definition

Saving: keeping part of your income now, instead of spending it, so that you can use it later. The money kept is called your savings.

Example: each trader keeping Frw 2,000 a week in the group box.

Definition

Savings group (ikimina, or village savings and loan association): a group of people who save a fixed amount regularly, lend from the pooled money to members, and share out the savings and earnings at the end of a cycle.

Example: the Muhanga traders' group.

Definition

Interest (on savings): money a bank or SACCO pays you for keeping your savings with it, usually a percentage of the amount per year.

Example: 6% a year on Frw 100,000 is Frw 6,000 a year.

Why save?

Emergencies: illness, a broken phone, a poor harvest.
Goals: school fees, a bicycle, stock or a sewing machine for a business.
Starting or growing a business without borrowing (Lesson 2).
Old age: an income when you can no longer work.
Access to loans: SACCOs and banks lend more readily to people with a savings record.

Where to save in Rwanda

Where	Safe?	Earns interest?	Good for
At home (a tin, a mattress)	No: theft, fire, and the temptation to spend	No	Very small amounts for a few days
Savings group (ikimina)	Fairly, if records are kept and members are trusted	A share of the group's loan charges	Regular small savings; small loans
Umurenge SACCO	Yes: regulated by the National Bank of Rwanda	Usually a little	Savings and loans close to home
Commercial bank	Yes: regulated	Yes, more on fixed deposits	Larger amounts; long-term saving
Mobile-money wallet	Yes, if your PIN stays secret	Some savings products pay a little	Everyday money; easy to reach
Ejo Heza (run by RSSB)	Yes: a government long-term savings scheme	Yes	Saving for old age, even in small amounts

Warning

If it sounds too good to be true, it is. Anyone who promises to double your money in a few weeks is running a scam; the early "winners" are paid with later victims' money. Save only with regulated institutions or a group whose members and records you know.

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Savings in numbers

$\text{total saved} = \text{amount saved each time} \times \text{number of times}$

$\text{time to reach a goal} = \frac{\text{goal}}{\text{amount saved each time}}$

Simple interest on savings, where $P$ is the amount saved, $R$ the interest rate per cent per year and $T$ the number of years:

$I = P \times \frac{R}{100} \times T$

Worked example

The traders' year (figures from the case)

Each member: $2{,}000 \times 52 = 104{,}000$ , so Frw 104,000 in a year.

The whole group: $20 \times 104{,}000 = 2{,}080{,}000$ , so Frw 2,080,000 passes through the box in a year, before any loan charges are added.

Worked example

Saving for a goal (illustrative prices)

Keza wants a school bag that costs Frw 18,000. She can save Frw 1,500 a week from her pocket money.

$\frac{18{,}000}{1{,}500} = 12$

She needs 12 weeks, about three months. If she saved Frw 2,000 a week instead, it would take $\dfrac{18{,}000}{2{,}000} = 9$ weeks.

Worked example

Starting early

Keza saves Frw 5,000 at the end of every month from January. Her cousin Kalisa saves the same amount, but starts in July.

Keza by December: $12 \times 5{,}000 = 60{,}000$ . Kalisa by December: $6 \times 5{,}000 = 30{,}000$ .

Same habit, same amount: starting six months earlier doubled Keza's savings by the end of the year.

Worked example

Interest on a SACCO deposit (illustrative rate)

Mugabo deposits Frw 100,000 at 6% a year for 2 years.

$I = 100{,}000 \times \frac{6}{100} \times 2 = 12{,}000$

After 2 years he has $100,000 + 12,000 = 112,000$ , so Frw 112,000, without doing anything except leaving the money alone.

Worked example

Ejo Heza in its first 18 months (real figures)

In July 2020, Rwanda Broadcasting Agency (RBA) reported that about 18 months after Ejo Heza was launched, more than 380,000 Rwandans had joined and had saved more than Rwf 4 billion. On average, per saver:

$\frac{4{,}000{,}000{,}000}{380{,}000} \approx 10{,}526$

Roughly Frw 10,500 each: small amounts, but together a very large sum. (Both totals were "more than", so the true average may differ a little.)

Tip

Pay yourself first. On the day money comes in, put your saving aside before you spend anything. A common target is at least one franc in every ten (10%).

RwandaTV (RBA), "18 months later, 380,000 Rwandans have saved a total of Rwf4 billion in Ejo Heza saving scheme" (2020, under 3 minutes). Watch for who can join Ejo Heza, how people pay in, and why the government wants people to save for old age.

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Activity: a savings plan

Choose something you want to buy or pay for, and find its real price.
Decide how much you can save each week, and calculate how many weeks it will take.
Decide where you will keep the money, and why that place is safe.
Keep a savings record for four weeks: date, amount saved, total so far. Compare with your plan.

Practice

Define saving, and give three reasons why people save.
Give two disadvantages of keeping savings at home.
Uwase saves Frw 3,000 a month. How much will she have saved after 2 years?
Gatete wants a football that costs Frw 12,500. He saves Frw 2,500 a week. How many weeks will it take?
Calculate the simple interest on Frw 250,000 saved for 3 years at 5% a year, and the total at the end.
A savings group has 15 members, each saving Frw 1,000 a week. How much does the group save in a year of 52 weeks?
Explain what "pay yourself first" means, and why it works better than saving what is left at the end of the month.

Show answersHide answers

Keeping part of your income to use later. Reasons: emergencies, goals such as school fees, starting a business, old age.
For example: it can be stolen or burnt, and it is easy to spend; it earns no interest.
$3{,}000 \times 24 = 72{,}000$ : Frw 72,000.
$\dfrac{12{,}500}{2{,}500} = 5$ weeks.
$I = 250{,}000 \times \dfrac{5}{100} \times 3 = 37{,}500$ ; total $250,000 + 37,500 = 287,500$ , so Frw 287,500.
$15 \times 1{,}000 \times 52 = 780{,}000$ : Frw 780,000.
Saving the planned amount as soon as money arrives, before spending. It works because money left in your pocket tends to be spent, so "what is left" is often nothing.

Sources and credits

Photo: Coffee Farming in Rwanda, Andrew Esiebo, courtesy of USADF (USAID in Africa), via Wikimedia Commons, public domain.
Video: 18 months later, 380,000 Rwandans have saved a total of Rwf4 billion in Ejo Heza saving scheme, RwandaTV, embedded from YouTube.
The Ejo Heza figures are from the RBA report above (July 2020).

Written by Ganzaa: the Muhanga case, the table, the chart, the worked examples, the activity and the practice items. Prices and interest rates are illustrative (2026).

1Case: twenty traders and a metal box

2Why save?

3Where to save in Rwanda

4Savings in numbers

5Activity: a savings plan

Case: twenty traders and a metal box

Why save?

Where to save in Rwanda

Savings in numbers

Activity: a savings plan