Cross-border investments will play a big role in the East African Community (EAC) integration process, the finance minister has said. Speaking during the Commercial Bank of Africa (CBA) launch dinner on Monday, Amb Claver Gatete said the entry of the Kenya-based lender could help fast-track the integration of regional financial services.
The minister said that local traders and Kenyans living in Rwanda will now find it easier to conduct cross-border money transfers or transact business, among other services, following the entry of the bank. Gatete added that Africa and Rwanda, in particular, needs strong financial institutions to boost economic growth, noting that there is already a comprehensive financial strategy in place to help achieve the objective. Minister Gatete added that CBA’s move to open shop in Rwanda was a “great step toward enhancing accesses to finance”.
The launch of CBA operations brings the number of commercial banks in the country to 16. The bank first entered the Rwandan market in January last year as a micro-finance institution, but it recently grew in stature after acquiring 100 per cent stake of Crane Bank Rwanda Limited from Uganda’s DFCU Bank.
Speaking at the event, John Rwangombwa, the Governor, National Bank of Rwanda (BNR), urged the bank to create leakages with the informal banking sector, saying this would help deepen financial inclusion. Rwangombwa also called on banks to leverage technology and embrace innovation to serve customers more efficiently besides easing cost of operations.
“We, therefore, would like to see Commercial Bank of Africa, as a fully-fledged lender, helping to increase access to banking services and at affordable rates,” he said, adding that the sector has been thriving with an annual average asset growth of almost 18 per cent.
Targeting unbanked Rwandans
Meanwhile, the bank has pledged to bring to the market more innovative and client-centric products that will help attract more people into the formal banking sector.
According to Desterio Oyatsi, the CBA group chairman, the re-launch of the bank’s integrated financial services was essentially in the spirit of increasing access to financial services.
Last year, the bank partnered with MTN Rwanda to launch MoKash to help boost mobile banking in the country. So far over 700,000 subscribers have registered on the mobile banking platform since its inception in February, 2017. The launch of MoKash in Rwanda was seen by many experts as being is in line with the Government’s objective of making Rwanda a cashless economy.
The bank has so far invested about $9.5 million in Rwanda (about Rwf8 billion), and the idea is to invest more resources that will help serve the unbanked. The lender has a net worth of more than $2.5 billion.
Oyatsi said the financial institution would leverage their present coverage to expedite regional integration, especially for financial services.
“We have taken a long-term positive view in our decision to invest in Rwanda. Our strategy has been to leverage technology to drive financial inclusion by banking the unbanked, and financially empowering people and businesses in the real economy. We aim to reach as many people as possible, thereby boosting financial inclusion in all our operations across the region,” he added.
The official said the bank is positioning itself to be the “intermediator and facilitator of regional business growth by supporting businesses venturing into across borders in the coming years”.
CBA Group boasts of over 33 million customers in five countries. The bank will initially operate three branches in Rwanda, including one at Kigali Heights, which was by Peace Uwase, the central bank director general for financial stability