International Journal of Interdisciplinary Research in Arts and Humanities (IJIRAH) Impact Factor: 5.225, ISSN (Online): 2456 - 3145 (www.dvpublication.com) Volume 8, Issue 1, 2023 33 ASSESSMENT OF THE EFFECT OF FINANCIAL INCLUSION POLICY ON SAVINGs IN MICROFINANCE INSTITUTIONS: CASE OF COPEDU PLC Mugabire Vedaste* & Prof. Dr. Mbonigaba Celestin** * Education Professional, Mediation and Anti-Corruption Ambassador, Professor, International & National Award Winner, Human Right Activist, Public-Private Business and Educational Consultant ** Assistant Lecturer, Department of Business Administration, Brainae University, Delaware, United States of America Cite This Article: Mugabire Vedaste & Prof. Dr. Mbonigaba Celestin, “Assessment of the Effect of Financial Inclusion Policy on Savings in Microfinance Institutions: Case of COPEDU PLC”, International Journal of Interdisciplinary Research in Arts and Humanities, Volume 8, Issue 1, Page Number 33-40, 2023. Abstract: The study examined the effect of financial inclusion policy on saving in Microfinance Institutions in Rwanda. The specific objectives were to analyse the effect of bank account on saving for beneficiaries of COPEDU PLC; to determine the extent to which the distance between the client and financial service provider influences the savings of beneficiaries in COPEDU PLC; analysed effect of financial literacy on saving of beneficiaries of COPEDU PLC; and to determine the relationship between financial inclusion policy and saving in MFIs in Rwanda. Target population was 2,871 beneficiaries of COPEDU PLC; this study applied the stratified random sampling technique to select 97 respondents from target population. The various instruments were used by the researcher for gathering information from respondents including Questionnaire and Interview guide. Descriptive statistical method and regression analysis stood in this study were methods of analysis. Findings showed that ownership of bank account have positive and significant effect on Saving on a bank account, and use of bank loan for beneficiaries in MFIs in Rwanda (β1= 0.071, t= .707; p-value= .481 less than 5%); that means Ho1 which states that Bank Account does not affect saving for beneficiaries of COPEDU PLC, was rejected. The results on distance between client and financial service provider has positive and significant effect on Saving on a bank account, and use of bank loan for beneficiaries in MFI in Rwanda (β2= .521, t= 4.760 and p-value= .000 less than 5%); Ho2 which stated that the distance between client and financial service provider do not influence savings of beneficiaries in COPEDU PLC, was rejected. Findings showed that financial literacy has positive and significant effect on Saving on a bank account, and use of bank loan for beneficiaries in MFIs in Rwanda (β3= .007, t= .077 and p-value= 0.939 greater than 5%); Ho3 stating that there is no significant effect of financial literacy on saving of beneficiaries of COPEDU PLC was rejected. Based on findings, we conclude that there is positive relationship between financial inclusion policy and saving in Microfinance institutions in Rwanda. Key Words: Financial Inclusion Policy, Saving, Loans, MFIs Introduction: Financial inclusion is where individuals and businesses have access to useful and affordable financial products and services that meet their needs in the overall country economic system. The first step of this process is to have a transaction account that channel users to other financial services [1]. In developed or developing countries worldwide, the process of ensuring access to financial services like savings, insurance, remittance, payments, and timely and adequate credit are needed by different categories of people especially vulnerable groups such as weaker sections and low-income groups at an affordable cost [2]. The financial inclusion policy empowers these vulnerable groups especially women empowerment, and it increases savings to them [3]. The financial inclusion policy setting contributes to poverty reduction and economic growth while access to the formal financial system increase asset ownership and serve as a catalyst to greater economic empowerment among women [4]. Moving from access to account-to-account usage is the next step for countries where 80% or more of the population have accounts [5]. Rwanda is one of Africa’s smallest, poorest and most densely populated countries; with a population of around 11 million. Although the country has made significant progress from the devastated nation that emerged from the 1994 genocide, it remains a severely underdeveloped country with around 44.9% of the population living under the poverty line. Rwanda as one of the least developed countries has taken the issue of poverty as a serious problem, hence devised a means of overcoming it. To reduce the poverty, the government of Rwanda has some actions related to the priority of poverty reduction; those actions include the enforcement of microfinance institutions [6]. The Fin Scope report in 2008 revealed that only 48% of Rwandan adults had access to financial services and products both formal and informal. Given the linkage between economic development and access to finance, the Government of Rwanda and DFID established Access to Finance Rwanda (AFR) in 2010, with a core mandate of promoting financial inclusion (Access to Finance, 2019). DFID, the World Bank, and KFW were the initial funders of access to finance Rwanda [7].