Every Franc Has a Job: Managing Personal and National Finance

1Before you read

1. If you were given Frw 50,000 today, what would you do with it? Write three lines.
2. Where do people you know keep their money: at home, on a phone, in a bank or in a savings group?
3. What do you think a "central bank" does that an ordinary bank does not?

2Reading: Every Franc Has a Job

A feature article written for this course. Mutesi is imagined; the figures come from the National Bank of Rwanda (BNR) and the FinScope survey of 2024.

1 For the first two years after she opened her tailoring stall in Huye, Mutesi had a simple system: when money came in, she spent it. A customer paid for a school uniform and the francs went on fabric, rent, a meal or a gift for her little brother. Some months were good and some were terrible, but at the end of every month the result was the same: nothing left. "I wasn't poor," she says now. "I was disorganised."

2 The change began with a notebook. On the first page Mutesi wrote down everything she earned in a month; on the second, everything she spent. Then she gave every franc a job before it arrived. Fixed needs came first: rent, fabric and transport. A set amount went into savings, even in a bad month. Only what remained went on wants. Financial advisers call this "paying yourself first", because saving is treated as a bill that must be paid, not as whatever happens to be left over.

3 She also changed where she kept her money. Cash under a mattress can be stolen, lost or simply spent too easily. Today most of Mutesi's customers pay her by mobile money, and in this she is typical. According to the FinScope survey of 2024, 77% of Rwandan adults used mobile money, and 96% used some kind of financial service, formal or informal. Yet only 22% had a bank account, a share that had not grown since 2020. Mutesi now has one, because a savings account does something that a phone wallet usually does not: it pays interest. In the first quarter of 2025, banks in Rwanda paid an average of 9.45% a year on deposits, according to BNR.

4 Interest works in both directions. In the same quarter, the average rate that banks charged on loans was 15.89%. The gap between the two rates is the main way a bank earns its living, and it is why borrowing should never be casual. Mutesi distinguishes between two kinds of debt. A loan for a second sewing machine, which would let her finish twice as many orders, could pay for itself. A loan for a new phone would not. "Borrow for something that earns," she says, "never for something that only costs."

5 A country manages its money in much the same way, only on a larger scale. Each year the Ministry of Finance and Economic Planning (MINECOFIN) prepares a national budget, which Parliament must approve. On one side is revenue: mainly taxes, collected by the Rwanda Revenue Authority, together with grants and loans from partners abroad. On the other side is expenditure: salaries, schools, hospitals, roads and the interest on past borrowing. When spending is greater than revenue, the government runs a deficit and must borrow to fill the gap. Like a household, a nation can borrow wisely, for investments that raise future income, or unwisely, for spending that leaves only debt behind.

6 Above both households and government stands the central bank. BNR does not lend to people like Mutesi. Its main task is price stability: it aims to keep inflation, the general rise in prices, between 2% and 8% a year, and close to 5% in the medium term. Its chief tool is the Central Bank Rate. When prices rise too fast, BNR raises the rate, which makes borrowing more expensive and slows spending; in August 2026, with inflation well above that band, it raised the rate to 8.75%. Inflation matters to savers too. If savings earn 5% while prices rise by 10%, the money in the account buys less at the end of the year than at the start.

7 Mutesi's notebook is now in its third year. She has an emergency fund worth two months' rent, and she is preparing to ask her bank for that loan. "Money is like rain on a hillside," she says. "If you don't build terraces, it runs straight past you."

3How Rwandan adults used financial services in 2024

Paragraph 3 quotes the FinScope survey. The chart shows more of its results; one adult can use several kinds of service, so the bars do not add up to 100%.

4Comprehension

Questions 1 to 5 test what the article says; 6 to 8 test what it means; 9 asks for your judgement.

1. What was Mutesi's money "system" in her first two years, and what was the result?
2. In what order does Mutesi now give her money its "jobs"?
3. Give three reasons from paragraph 3 why keeping cash at home is risky.
4. What contrast does the writer draw between mobile money and bank accounts in Rwanda?
5. According to paragraph 6, what is BNR's main task, and what is its chief tool?
6. "I wasn't poor. I was disorganised." What does Mutesi mean?
7. Explain "Borrow for something that earns, never for something that only costs", using the two loans in paragraph 4.
8. Paragraph 5 says a country manages its money "in much the same way" as a household. Give two similarities from the article and one important difference.
9. Is the image of rain and terraces in paragraph 7 a good way to end the article? Give a reason.

Show answersHide answers

1. She spent money as soon as it came in; at the end of every month she had nothing left.
2. Fixed needs first (rent, fabric, transport), then a set amount of savings, then wants with whatever remains.
3. It can be stolen, it can be lost, and it is spent too easily.
4. Mobile money is very widely used (77% of adults in 2024), but only 22% of adults have a bank account, a share that has not grown since 2020.
5. Price stability: keeping inflation between 2% and 8%, close to 5%. Its chief tool is the Central Bank Rate.
6. She earned enough; her problem was that she did not plan how to use it.
7. A second sewing machine would increase her income, so it could repay the loan; a phone produces no income, so the loan would only add a cost.
8. Similarities: both have income (earnings or revenue) and spending; both can borrow wisely for investment or unwisely for consumption. Difference, for example: a nation's budget must be approved by Parliament, and its revenue comes mainly from taxes.
9. Model: Yes. Terraces are a familiar sight in Rwanda, and the image sums up the article's message: money, like rain, is useful only if you build a structure (a budget) to catch it.

5Vocabulary in context