Accessing credit in Rwanda has for long been characterized by rigorous processes and requirements that have been seen as frustrating for many. A local financial institution, I&M Bank is attempting to change the trend. The bank has revised its Éclair Loan product where they will lend up to 17.5 times one’s salary without collateral. The bank says that the move to increase unsecured loans from 12 times one’s salary to 17.5 times will respond to market demand and consumer needs. Faustin Byishimo the Executive Director at I&M Bank Rwanda said that the move is also buoyed by their experience over the years as well as adjustment in the regulatory framework. The efficiency of the Credit Reference Bureau, he said, has seen the availability of more reliable data giving them confidence on their move. “There have also been changes in the local framework that has improved our confidence. For instance, due to the Credit Reference Bureau, One cannot just divert their salaries without due process. The data is cleaner and reliability is much higher,” he said. To address the market demands, Byishimo said that they have noticed a rise in demand for loans, especially as the middle class, expanding. As the middle class expands, he said that there is a demand for loans as this group seeks to acquire assets and make investments for personal growth. “Salaries do not always grow but the demand for money has grown, people may want to make investments or acquisitions and acquire more things. There is demand,” he said. Beyond raising the limit on the loans, the lender has also reviewed features and requirements to ease access to credit. The bank has reduced the requirements from 10 documents to 3 documents as well as reduced the time to approval by 50 per cent to 48 hours. This he noted is geared at further improving customer experience in access to credit. To ensure ease of payment and reduce the burden on clients, one cannot commit more than 50 per cent of their monthly salary to ensure that they still have disposable incomes during the course of repayment of the loan. Beyond salaried people, the product also targets professionals such as lawyers, doctors and architects who may not be salaried but have regular income. With regard to mortgages, the lender has increased the tenure from 20 years to 25 years to become among those with the longest repayment period. The extension of the repayment period Byishimo he said is to make it possible for more people to be eligible to mortgages as the repayment period has often been in the way of a large number of potential homeowners. The development also enables more people to own their ‘dream homes’. By extending the tenure to 25 years for mortgage repayment, Byishimo said that it’s proof of their confidence in the economy, industries involved in the process such as insurance, construction among others. The bank’s confidence to extend the repayment duration from 20 to 25 years, is among other things based on efficiency on framework such as land registration processes, foreclosure procedures among others. The bank also has long experience in mortgages enabling them access market demand and trends. “We are well ahead of the market by having a 20-year mortgage which has been existing since 2007, we took a risk then, we have now extended it in 25 years. We were among the first to have long term mortgages and others are following suit,” he said. The lender has also decentralized access to most of its services such as access to credit cards, salary overdrafts among others. The lender is also in the process of automating and digitizing their systems as well as training their staff. The bank in 2018, made a profit of Rwf7.5 billion after-tax up from Rwf6.5 billion that was registered in 2017. I&M Bank, which is listed locally on Rwanda Stock Exchange, in May allocated Rwf2.99 billion in payout to its shareholders as dividends.
