The government will soon sell its 19.8 per cent stake in I&M Bank, a statement from the Ministry of Finance and Economic Planning indicates.

According to the statement, the shares will be offered to the public in an initial public offering (IPO) through the Rwanda Stock Exchange (RSE), a move aimed at supporting development of the capital market in Rwanda.

"The listing is part of a wider government plan to divest shares it has in companies through the stock exchange in order to support the growth and development of the capital market in Rwanda,” Robert Mathu, the executive director of the Capital Markets Authority, which is overseeing the process, told Business Times.

"This will also influence access to long-term capital by the public and private sectors of the economy,” he added.

Ministry of Finance has already published a tender notice, seeking consultants for the provision of advisory services pertaining the listing.

According to the tender issued last Wednesday, the ministry is looking for a lead transaction advisor, lead broker and a co-sponsoring broker, as well as legal advisor. It is also seeking a reporting accountant, public relations consultant, a receiving bank and a share registrar.

Once listed at the exchange, I&M Bank Rwanda will be the seventh company, and fourth financial institution to list on the bourse, after Bank of Kigali, Bralirwa, Nation Media Group, Uchumi Supermarkets, Equity Group Holdings and KCB Bank Group.

I&M Bank, formerly known as Banque Commerciale du Rwanda (BCR), opened shop in 1963 and was the first commercial bank in Rwanda.

In 2012, Kenyan banking group, I&M Bank Group acquired 80 per cent shareholding in the financial institution, which resulted in the bank being rebranded to I&M Bank Rwanda Limited.

The bank should attract investor interest, especially as it is now performing well. It recorded an increase in net profit last year, from Rwf4.5 billion in 2013 to Rwf4.56 billion, driven by a reduction in non-performing loans and focus on profitable loan segments like mortgage and small and medium enterprises loans, according to Sanjeev Anand, the bank’s managing director.

"The bank’s loans and advances also rose by 26 per cent compared to a 19 per cent growth registered by the overall industry, while customer deposits were up by 22 per cent,” he said while presenting the financials.

Sector commentators and analysts say the share sale is good for local investors, as it widens avenues for people to save and improve their livelihoods.  Davis Gathaara, the managing director of Baraka Capital, a local brokerage firm, said the IPO will be a quick win for everyone, especially Rwandan investors who would now have yet another investment option.

"It’s a good opportunity, especially for big institutional investors like the Rwanda Social Security Board (RSSB) and other insurance companies to invest,” he said while commenting on the pending listing of I&M Bank shares on the bourse.

He noted that insurance firms and other investors at the exchange have often yearned for more products as they had reached their investment limits on the few RSE-listed companies.

He said the I&M Bank IPO will lead to more product diversity at the bourse and increase liquidity levels, "and it will also attract more people to invest in shares”.

He however, advised current investors on the bourse to secure other sources of funding to diversify investment portfolios when they buy I&M Bank shares.