Access to Financial services    Govt targets 80 per cent

Equity Bank, Kenya’s giant commercial bank, is the latest regional banking institution to join Rwanda’s banking industry, boosting government’s efforts to raise the population that access banking services to 80 percent by 2020. The last survey that was carried out by the Rwanda National Bank in 2008 put Rwanda’s banked population at 21 percent. Government seeks to increase financial inclusion to 80 percent in eight years. Equity Bank joins Kenya Commercial Bank as well as West Africa’s Access Bank and Ecobank in the increasingly competitive Rwandan market.According to Dr James Mwangi, Equity’s group Managing Director, the bank intends to serve the rural masses as it has successfully done in Kenya. The low level of financial inclusion can be attributed to the insufficient banking penetration in rural masses."We exist to transform the lives and livelihoods of the people socially and economically, and we moved to Rwanda with a clear mission to avail modern and inclusive financial services,” said Mwangi.Currently, the banking sector continues to dominate Rwanda’s financial sector, controlling over 73 percent of the total assets.With the banking sector composed of nine commercial banks, one development bank, three micro finance banks and one cooperative bank, analysts predict a significant growth in the sector with the population the ultimate beneficiary. Robert Mathu, the Executive Director of Rwanda Capital Markets Authority (CMA), said that more banks into the industry are healthy for Rwanda as it would give banking options to the people."Given the low level of banking penetration in Rwanda, Equity’s entry is good and it will also help improve the standards for financial services,” said Mathu. Equity Bank, with a presence in Kenya, Uganda and South Sudan, was lured by Rwanda’s stable economic growth in the recent past, according to Mwangi. In 2011, Rwanda’s economy grew by 8.8 percent, higher than the projected 7.0 percent, and 7.5 percent for 2010. The growth rate was significantly higher than the expected growth of 5.2 percent for sub-Saharan countries.Within three months of operations, Equity has opened seven branches with plans for establishing three more before the end of the year. It has so far managed to attract more than Rwf5.2 billion in customer deposits with Rwf1 billion already advanced out as loans. The bank has registered over 30,000 customers.So far, the Kenyan bank has invested US$12 million in Rwanda with plans to inject a further US$10 million for constructing the Group’s regional office in Kigali.With the best non-performing loan and one of the best in Africa at a gross and net of 3.7 percent and 1.3 percent, respectively, the bank’s interest rates in Uganda is between 28-30 percent, while in Kenya it is between 24-25 percent and in Rwanda it is 15-18 percent.The Minister of Finance, John Rwangombwa, said: "Equity’s entry will help boost the government’s efforts to ensure banking services penetration.”