Banking Sector supplement

National Bank of Rwanda The heartbeat and financial radar of Rwanda’s economy By Moses KiruiThe National Bank of Rwanda with a solemn mandate in its mission of ensuring and maintaining financial stability, enhancing and maintaining a stable and competitive financial system without any exclusion while supporting Government’s general economic policies, has amicably executed its responsibilities that are clearly manifested in the fabulous outcomes experienced by the Rwandan finance sector.

National Bank of Rwanda

The heartbeat and financial radar of Rwanda’s economy

By Moses Kirui
The National Bank of Rwanda with a solemn mandate in its mission of ensuring and maintaining financial stability, enhancing and maintaining a stable and competitive financial system without any exclusion while supporting Government’s general economic policies, has amicably executed its responsibilities that are clearly manifested in the fabulous outcomes experienced by the Rwandan finance sector.

The bank has achieved its missions, by defining and implementing the monetary policy; organizing, supervising and regulating the foreign exchange market; supervising and regulating the activities of financial institutions notably banks, micro finance institutions, insurance companies, social security institutions, collective placement companies and pension funds institutions; supervising and regulating payment systems; minting and managing money; holding and managing official foreign exchange reserves and acting as State Cashier.

The bank has continuously executed its responsibility that has ensured stability in the Rwandan financial sector.
For instance, in Rwanda, economic activities have been significantly improving compared to the first half of 2010, as evidenced by growth in agricultural production (+11.3%) and leading indicators of economic activities such as the BNR composite index (+9.5%) and total turnover registered by large companies in the industry and services sectors (+23.9%) on annual basis. External trade also performed well, recording an increase in exports and imports. Export volume and value increased by 58.23% and 48.09% respectively, driven by traditional exports. Strong performance in exports led to a significant improvement in imports cover by exports, standing at 21% in the first half of 2011 from 16.2% during the same period of 2010.
Regarding consumer prices developments, headline inflation has been increasing, but maintained at moderate levels. From 0.2% in December 2010, it stood at 4.1% in March and 5.8% in June 2011, driven mainly by food, energy and education prices.

Monetary policy, which falls within the responsibilities of the National Bank of Rwanda is part of this program and has a particular role of creating an environment that is conducive for fostering production and investment through ensuring macroeconomic stability. The National Bank of Rwanda’s action is geared towards controlling liquidity within the national economy and monitoring the financial system.

The Bnr has been implementing a proactive monetary policy to continue supporting the provision of credit to the economy, as long as inflation pressures are well anchored. In addition, the Rwandan Franc stability has been maintained by a flexible exchange rate regime.

During the first half of 2011, overall financial industry performance recorded positive growth while financial sector supervisory actions continued to strengthen the regulatory framework aiming at enhancing financial stability.

Furthermore, the sector is experiencing significant improvement in competition brought about by entry of new players.

Banks have built significant capital buffers over the years and remain well capitalized with capital adequacy ratio of 24.6% end June 2011, well above regulatory required capital of 15%.

In regard to the implementation of the UMURENGE SACCO program, deposits collected and loans granted under the program amounted to RWF 14.7 Billion and RWF 1.8 Billion, respectively as at June 30, 2011. Regarding the monitoring and supervision of SACCOs, a technical control Unit, which is a team of 2 inspectors appointed in each district, has been operational from May 2011.
In its endeavors to promote financial inclusion, BNR is monitoring the establishment of Access to Finance Forums (AFF) in each district. The AFF is a platform where local authorities, financial institutions, the technical Control unit of SACCOs and development partners meet and discuss the constraints relating to access to finance on both demand and supply sides and working out how to address them.
With regard to Non Bank Financial Institutions, prudential meetings were held with insurers, and a number of recommendations were reached in the area of meeting new capital and solvency regulatory requirements as provided in the new Insurance Act. It is hoped that by the end of the year 2011, all insurance companies will be in compliance with the entire regulatory and supervisory requirement.
Regarding the pension sector, some of the required regulations have been worked out and others are in the pipeline. Thus, it is expected that by the end of the year, all pension regulations shall be finalized.
The capital market has experienced new developments ranging from regulatory framework to new products listed on the Rwanda Stock Exchange. Capital Market Authority (CMA) and Rwanda Stock Exchange (RSE) have been established to replace the Capital Market Advisory Council.
With regard to payment System Modernization, the Central Securities Depository (CSD), the second component of Rwanda Integrated Payments Processing System (RIPPS) has been completed and launched. The CSD is a centralized electronic system for registering and tracking the ownership of both Government and private securities. On retail payment systems, the banks continued to issue payment cards and deploy ATMS and POS. Mobile payments have also taken off dramatically by TIGO and MTN. Concerted efforts are being put in the deployment of POS and the acquiring of the major international cards on the infrastructure.
To ensure that time critical payments are settled in real time, the BNR has implemented a real time settlement system-the Rwanda Integrated Payments Processing System (RIPPS), encompassing the Automated Clearing House (ACH), the Real Time Gross Settlement (RTGS) and the Central Securities Depository (CSD), all three running on the same platform. Implementation is complete and the system went live on 11th February 2011.
With regard to card based payment system, a new commercial agreement was signed between SIMTEL and the banks to address the main bottlenecks in the card based payment infrastructure. The number of ATMs has drastically increased since then and now it stands at 88 ATMs.
Before the new Service Level Agreement, only 99 POS existed and only accepted international cards. We now have more POS being ordered by banks from SIMTEL (250 POS) and these will accept both local and international cards. In addition, the mobile banking is developing rapidly. With these all ongoing reforms in the payment systems which have reached advanced stages, we do expect a major shift towards using modern payment instruments by the end 2011.
“The bank has ensured easy access to financial statements and money transfer whether in bulk or in small amounts, the faster the money moves, the faster the economy grows” he explained
The National Bank of Rwanda (BNR) launched the long awaited RIPPS (Rwanda Integrated Payments Processing System) on 15th February 2011. This is a system that is set to revolutionalize the way business transactions are conducted in the country.
The National Bank, before it launched RIPPS ensured some reforms were made with the existing National Payment Systems. The reforms were to mitigate the existing weaknesses in the payment structure which include: rudimentary payment instruments, long payment lags, lack of electronic means of payment among others.
These weaknesses in the National Payment System (NPS) not only did they stifle business transactions but also do not match international or regional payment standards.
The National Bank of Rwanda’s vision behind the launch of RIPPS is to migrate from a cash-based to a-cash-less payment system, increase equal access to modern payment system for the whole population, bridge the compliance gap with international standards and open interoperable infrastructure to all service providers.
Due to all these mentioned initiatives and achievements, the state of Rwanda in terms of finance stands out to be stable and resilient as per a report from a joint mission of the World Bank in February this year that carries out an assessment after every 5 years. The report from the finance sector assessment program indicated that Rwanda’s finance sector was very stable and can withstand any shocks.
On 15th February 2011, the Management of National Bank of Rwanda, various Managers of the Rwanda financial sector and other actors and stakeholders in the economic field gathered at BNR Headquarters to discuss the preliminary report with the IMF/World Bank team.
The IMF carried out a similar assessment of the status quo of Rwanda’s financial sector in 2005. During the meeting, IMF/World Bank experts presented their findings and recommendations. Their assessment covered areas that include: Rwanda commercial Banks; Banking structure and competition; financial sector infrastructure; Housing finance; Development issues; Insurance, pensions and Capital markets.
One of the major outcomes of the draft report compiled by the World Bank/IMF assessment of Rwanda’s financial sector “stress testing” indicates that “Rwandan Banks were generally resilient to external shocks.”
“This is typically a reflection of our tight regulations in terms of monetary policies and supervision, it is the same spirit that enabled the bank to stand firm in Rwanda without any single case of collapsion experienced by many banks in 2009 financial crisis” says Ambassador Claver Gatete, the Central Bank Governor
BNR supervision Role
The Bank is committed to the financial status of the country and in a bid to ensure this; it has constantly embarked on working with all the financial institutions in ensuring that all policies regarding financial aspects are adhered to the brink.
Gatete explains that there are two kinds of supervision; off- sight inspection and on- sight inspection, for all the banks BNR carries out on sight inspection every year, where they visit a given bank and do a thorough inspection to get a real report from their books to compare with the report the banks send. With off sight inspection, the banks are obliged by the law to do their reports and send to BNR. Banks send information on a daily, weekly or monthly basis in a template provided by BNR and in every quarter, BNR holds a meeting with the banks to evaluate the progress.
“It should be noted that our regulations conform to the international standards and with this kind of inspection it enables us know the state of Banks inside out” asserted Gatete
Through this kind of supervision the Capital adequacy ratio has been ensured in banks, the average adequacy ratio for the Banks is 25% which is even beyond the normal expectations. The Non performing loans have also been dropping drastically. From 40% in 2005 it has come to 9.2% and even more to the target of 5% percent to e in the same range with the developed countries. Assets are growing by 14 %, deposits and loans are growing as a reflection of great supervision and great policies.
BNR has put in place the Credit Reference Bureau that has ensured that borrowers stick to their promises of repaying their loans on time. The bureau keeps all the information about the borrower in all the financial sectors. If borrowers fail to pay back the money, actions are taken against them.
The Credit Reference Bureau also ensures that before anyone receives the loan their details are well verified and their financial trends tracked to ensure integrity and certainty of loan servicing. This and other measures create confidence among the banks that, in turn, avail enough money for banks in the loans folio.
The bank is also advocating for the financial literacy campaign that will be launched this year to equip all the citizens with information concerning all the banking operations. The main aim is to make sure that Rwanda is cash -less society i.e individuals’ not carrying cash everywhere with them.
“We discovered that the great problem is lack of know-how and education and that’s what we are planning to do so that every individual is informed on the modern banking procedures” Ambassador Gatete enthuses.

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Rwanda Development Bank

A development partner of all times
Transforming lives from the grassroots

By Moses Kirui
Individuals who have been wondering about the value of banking with a reliable and efficient bank, with easy access to competent services and the best products, have all come to conclusion that’s it is Rwanda Development Bank.
The Rwanda Development Bank, (BRD, by the French acronym) is a Public Company Limited by Shares, with a share capital of RWF 7,000,021,000, registered at the Office of the Registrar General, incorporated on August 5, 1967.
For more than four decades, BRD has been the sole provider of long-term finance facilities and has significantly contributed to the emergence of different productive enterprises in the private sector, directly and indirectly boosting people’s standards of living in Rwanda. The bank offers a wide range of products including: Loans, Trade Finance, Leasing, Equity, Deposit Taking, Refinancing, Mortgage Financing, Capacity Building and Business Advisory.
With its Vision of being the leader of productive investment and the most profitable Bank at the service of poverty reduction and emerging as the Government of Rwanda’s investment arm that finances the nation’s development objectives with a focus on the priority sectors of the economy, the bank has experienced immense growth and expansion since its establishment.
For instance on the 26th April 2011, the Rwanda Development Bank officially acquired Banque de l’Habitat du Rwanda (BHR) in a ceremony hosted by Honorable Minister of Finance and Economic Planning, Mr. John Rwangombwa. This takeover gave BRD an asset base of over Rwf72 Billion (Rwf58 billion of BRD and Rwf14 billion from BHR).
The objective of this acquisition was to achieve sustainable growth by making BRD a stronger and better positioned bank which provides long-term loans, housing loans, mortgage re-financing and other financial services that will improve access to finance in Rwanda.
In a bid to improve on service delivery and provide superb products, BRD Advisory Services (BAS Ltd) and BRD Development Fund (BDF Ltd) companies were merged to form a new company called BDF Ltd.
BDF Ltd is tasked with the mission of providing services and products that boost the development of SME’s in Rwanda. The new company remained subsidiary to BRD and streamlined the previous mission.
Generally, BRD is at the forefront in fast-tracking economic development in Rwanda and boosting lives of Rwandans as a whole.
In order to achieve that mission, BRD carries out the following operations on its own behalf, on behalf of the Government and public institutions as well as that of companies and individuals of the private sector:
The Bank takes active interest in the creation and Development of enterprises that can contribute to the economic development of the country, by way of direct or indirect participation to the capital, subscription of bonds, cash vouchers or equivalent and granting of short, medium and long term credits;
Provides technical support in the assessment and study of problems and projects of interest to the country;
Searching for and study investment opportunities useful to the development of national economy;
Promoting key enterprises that arises from national development plans ;
Rendering technical assistance to existing enterprises and those being formed, with regard to searching for solutions to all sorts of problems relating to their organization, operation and management ;
Mobilizing both internal and external resources for investment and financing of all banking operations;
Receiving and Managing all types of funds, whether special or not, public or private ;
Making all the other operations those directly or indirectly facilitate the fulfillment of its purpose.
The mission and the vision of the bank and all the strategic plans will not have been accomplished and utilized if it wasn’t for what BRD is and what it advocates throughout its operations. BRD advocates and upholds:
Professionalism
BRD staff has to be highly qualified, motivated with respect to the professional ethics
Quality of the service
The quality of the service provided by BRD has to go beyond the customers’ expectations
Efficiency and effectiveness
The Bank has to set up clear and measurable objectives in term of the portfolio quality and growth as well profitability of all its operations.
Innovation
The bank has to be innovative and dynamic, in order to provide good financing tools or products and financing conditions to the customers.
While BRD is mostly known as a bank which gives out loans to private projects that add value to products and to the economy in general, it should not be forgotten that its core mission is to function as the government’s investment arm that finances the nation’s development objectives with a focus on the priority sectors of the economy.
It is upon that basis that BRD has been mandated by the Government of Rwanda to act as the investment arm financing the nation’s development objectives with a focus on the priority sectors of the economy. BRD supports the Rwandan agricultural transformation through financing value addition projects. Since 2007, 191 projects worth to 9.5 Billion Rwf have been financed in primary agriculture, farming and agricultural transformation sectors.
One of the projects that have been identified and received funding from BRD is the Kinazi Cassava Flour Processing Plant, in Rutabo, Kinazi Sector, and Ruhango District of the Southern Province. BRD will sink in RwF5 billion in the construction of the plant.
In an effort to boost dairy sector, government through the Rwanda Development Bank (BRD) has embarked on a plan to revitalize the sector. BRD has a long history of involvement in rural development. Since 2006, the Bank has financed the importation of exotic in–calf Jersey and Friesian heifers which were given out to farmers under a loan scheme.
The increase in cattle population has led to an increase in milk production but challenges in marketing and processing still abound. Realizing the critical role the Bank has to play in the Country’s development agenda, BRD is facilitating the upgrading of milk collection centres to boost the country’s efforts to become self sustaining in dairy production. Government realized that a lot of milk was being produced but there was no market.
A decision was reached to build Milk Collection Centres (MCC’s). BRD was mandated to implement a project to construct 70 MCC’s countrywide. Twenty-one MCC’s have been constructed and equipped. Two are now operational. Each Milk Collection Centre has a capacity to store 5,000 litres of milk. The financing of MCCs construction is a mix of equity, debt and subsidy to ensure ownership by stakeholders.
BRD is involved in mortgage refinancing. This financing goes both to individuals or real developers to make possible the construction of large scale real estate units, mainly residential.
Another way in which BRD uses its unique status is by providing some new entrepreneurs a loan without them having to come up with collateral. This is done through the Business Plan Competition (BPC), organized jointly with the Private Sector Federation (PSF). In this competition, new entrepreneurs are invited to present their business project, and the winners then receive a loan from BRD to set it up, while the BPC acts as the guarantor.
For many years, the BRD has made significant contribution to the social and economic development in Rwanda through provision of access to finance in support of various economic projects. The Bank has been at the forefront in financing projects that have changed and redefined the lives of Rwandans.
The bank has put measures in place in a bid to ensure food security, nutritional security, poverty reduction strategies, education for all and promotion of gender equity.
Growth in this sector is crucial as it will contribute to the country’s objectives outlined in the Economic Development and Poverty Reduction Strategy and the Vision 2020.
In an effort to boost this sector, government through the Rwanda Development Bank (BRD) has embarked on a plan to revitalize the sector. BRD has a long history of involvement in rural development.
BRD has a strategy of mobilizing and financing to enable Rwanda’s development through; special financing programs for key export sectors, contribute to the development of microfinance services and expand its product portfolio in order to respond to customer needs. The bank also engages and supports key partners and clients in a bid to increase effectiveness through reconfiguration and training
Rwanda Development Bank operates in all sectors of productive investment that generate value addition with positive social, economic and environmental impact aligned both with national strategies and the Bank’s strategic priorities.
BRD helps improving health care services in Rwanda, through financing projects that helps in improving health sector. For the last 5 years, 45 projects worth to 12.4 Billion Rwf have been approved in education and health sectors.
BRD is behind the vision of turning Rwanda into an ICT hub and take technology to higher levels. Brd has embraced the use of ICT in all their banking operations that has ensured easy access to information and effective transactions. The bank is in a move to take ICT to where it has never been before.
The ICT has a high table position in BRD’s banking. Every client can access information related to his account or/ and his loan folio either on his phone or online (Internet banking).
World markets have never been so accessible; BRD keeps one access international markets, through Import/Export financing support. 192 projects amounting to 28.8 Billion Rwf have been approved since 2007.
As the Government of Rwanda’s investment arm, BRD’s financial development objectives focus on the priority sectors of the economy. It aims at becoming the first stop for all long term investments into Rwanda’s key sectors and to be the prime driver of viable private sector investments. BRD has long been and is still the main financier of medium and long term investments, with a market share of 40%. It also has a stellar record in honoring credit lines, in financing high risk sectors and a strong debut in microfinance.
BRD plans to inject Rwf 160 billion into the Rwandan economy over 2010-2014 and grow its portfolio from Rwf 36.1 billion in 2009 to over 178 billion in 2014. The bulk of these resources will focus on stimulating economic growth, accelerating Rwanda’s development agenda and reducing poverty. This investment will create nearly 150,000 jobs which will impact on more than 1,000,000 livelihoods.
BRD wants to confirm its triple role of being “Financier, Advisor and Partner, by setting up two subsidiary companies which are BRD Advisory Services (BAS) and BRD Development Fund (BDF). Whereas BRD will continue to develop the country through direct investments, BAS and BDF will offer advisory services and Fund management services respectively for a sustained momentum of SME development.
The Bank will also diversify its portfolio by financing real estate and developing trade finance facilities.
BRD want to build a customer care culture by always satisfying the client expectations and bringing its services closer to the customer by setting up four branches in Kayonza(Eastern Province), Musanze (Northern Province), Karongi (Western Province) and Huye (Southern Province).
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Bank of Kigali

Financially Transforming Lives
Meeting and exceeding customer expectations

By Moses Kirui
Bank of Kigali (BK) is the leading commercial bank in Rwanda in market share and assets (27%), net loans (31%), customer deposits (26%), and shareholders’ equity (32%) as of 31 December 2010. The size and market leadership provides the Bank with exceptional competitive opportunities including the ability to meet its customers’ evolving needs.
The Bank has strong corporate customer relationship and enjoys considerable loyalty from its customers due to its customer-focused policies. In 2009, Bank of Kigali changed its focus to the retail market which remains largely unbanked and under-banked. In order to reach the unbanked, BK has embarked on an aggressive branch expansion strategy as well as investing heavily in technology-driven channels particularly ATMs, Point of Sales terminals, telephone and internet banking.
“In every town you go to in Rwanda and meet an investment ranging from retail to corporate, Bank of Kigali must have participated in one way or another in funding it” asserts the Bank of Kigali Chief Operating Officer, Lawson Naibo.
Bank of Kigali is also the only credit rated company in Rwanda after receiving an A+ rating by Global Credit Rating Company (South Africa). The Bank has successfully negotiated two long term loans with the European Investment Bank and French Development Agency of €5 million and $20 million respectively to enhance lending particularly to the SME sector as well as reducing the asset-liability mismatch.
BK is the best capitalized bank in the market with shareholders’ funds of Rwf 32,785 million as at March 2011. The Initial Public Offer has raised an additional Rwf 20,855 million. The Bank’s large capital base makes it possible for the Bank to undertake large project finance and still comply with the BNR guidelines on the maximum counterparty lending limits. Over the years, the Bank has consistently accounted for over 50% of the banking sector profits.
BK at the heart of the national economic agenda
Over the years, the BK has made significant contribution to the social and economic development in Rwanda through provision of access to finance. The Bank has been at the forefront in financing projects that have changed and defined the landscape of Rwanda due to its strong capital base which increased further with the conclusion of the capital raising Initial Public Offering whose listing in the Rwanda Stock Exchange is scheduled for the 29th August 2011.
In 2010, the BK motto changed to “Financially Transforming Lives” as it was recognized the role BK has to play in providing financial services to the largely unbanked/under-banked population in order to uplift their socio-economic status.
Over the years, the Bank has made significant contribution to the social and economic development in Rwanda through job creation and provision of access to finance but this was mainly to corporate and SMEs. In addition to this BK wants to spearhead the penetration of financial services to the nation’s unbanked and under-banked through the continued expansion of Bank’s the branch network and electronic banking infrastructure.

Practical financial solutions
Bank of Kigali aspires to be the leading provider of the most innovative financial solutions in the region’ and a leader in creating value for our all its stakeholders by providing the best financial services to its business and individual customers, through motivated and professional staff. In this regard the Bank has ensured the availability of great initiatives that enable categories of people associate with the Bank of Kigali. The initiatives include:
Managing the quality of assets to maximize shareholder returns
The bank developed a fabulous way of managing the quality of assets to maximize shareholder returns. In 2009, banks in Rwanda faced serious liquidity crisis occasioned by the impact of the global recession and the major depositors withdrawing their deposits in favour of other alternative investment opportunities. This increased the cost of deposits and higher nonperforming assets. As a results overall banking sector profitability dropped by 59% compared to 2008.
Contrary to the move made by the other banks, the Bank made a deliberate decision not to increase lending rates following the liquidity crisis. High lending rates will slow the pace of the country’s development and lead to higher nonperforming assets.
The Bank’s NPA ratio in 2009 has come down to 8.2% against the market average of 19.1%. This helped the Bank to gain more loyalty and attract good borrowing customers. Profits were modestly 6% lower than that of 2008, compared to the overall banking sector profitability decline of 59%.
Diversifying sources of funding in order to manage the asset/liability mismatch.
The structure of the financial markets in Rwanda is such that banks finance their assets using short term deposits thereby resulting to high mismatch risk. This structure was responsible for the liquidity crisis in 2009 and the larger part of 2010, when major depositors withdrew their deposits in favour of alternative investments especially commercial property development and investment in capital markets in other countries.
To shore up the Bank’s mismatch risk and ensure sustainability of shareholder returns, the Bank negotiated a long term, a Euro 5 million, credit line with the European Investment Bank. The Bank has also signed another $20 million credit line with the French Development Agency and is negotiating another US$.12 million credit line with another international development financial institution to further diversify the sources of funding and reduce reliance on short-term deposits. The credit lines will be used to develop the projected growth in retail and SME lending that is at the heart of Rwanda’s fast growing economy and development.
Corporate governance and risk management structures
The Bank has an independent and diversified board which combines both local and international experience to give management guidance on local and international best practice in corporate governance and risk management. This year, the Bank put in place an Anti-Money Laundering Policy and Know Your Customer policies in order to prevent money laundering and terrorist financing. The Bank has also put in place an environment sustainability policy which will be instrumental in ensuring that the Bank project financing does not harm the fragile environment of Rwanda.
Reliable and spreading wings
It is said that ‘anywhere around the place is not the place, this is the place’ and with all services and initiatives that the Bank of Kigali has, anywhere around Bank of Kigali is not the place, Bank of Kigali is the place.
Bank of Kigali has been at the fore front in delivering and inventing great services to their clients in any place at any given time; Creating foundation for success and competitive advantage:
Strong Market Positioning
The Bank dominates the market with shares of 27.4%, 31.5% and 25.9% in total assets, loans and customer deposits respectively. The Bank’s profits for 2010 accounted for 56.5% of the sector’s profits. The Bank is the best capitalized bank in the market and is therefore able to finance large projects without contravening the single obligor limit of 25% of core capital set by the regulators.
Listing of Bank of Kigali Shares on the Rwanda Stock Exchange
The Bank offered 45% of its shares to the public in Rwanda’s second domestic IPO. The Bank is expected to raise approximately Rwf 20.8 (US$. 30 million) from the capital raising. The injection of capital will further consolidate the bank’s position as best capitalized bank in Rwanda and increase its ability to finance large projects. In addition, the Bank now has access to the capital markets in the event that it needs to raise further long term financing domestically.
Expansion in the Bank’s branch network
From 18 branches in 2009, the bank has 37 branches as at 31st July 2011, eight more branches will be operational by the end of 2011. This is in line with BK’s customer service promise of bringing services closer to the population to financially transform lives in Rwanda. In the effort the Bank plays a positive catalytic economic role in the areas that the branches are established.
Investment in technology-based delivery channels
BK has increased its ATM infrastructure from 6 to 20, as at the end of 2010, and expects to have 46 operational ATMs by the end of 2011. The Bank has also increased merchant points of sale (PoSs) to 100 and is looking forward to making them 500.
This investment will make BK the biggest investor in the card-based payment systems. In 2010 the bank launched SMS banking platform which gives customers the ability to pay for the electricity, pay TV, mobile telephone airtime and transfer funds between accounts. All these initiatives will enable the Bank to deliver financial services to its existing clients and the unbanked population conveniently and cheaply 24/7.
Dazzling new products
The Bank has expanded its products offering to cater for different demographics. The Rwandan population structure shows that the population is skewed to women and the youth. In 2010, the bank launched a Youth Savings and Entrepreneurship facility targeted at this group to encourage a culture of savings and spur a spirit of entrepreneurship amongst the youth so that the economy can reap from this demographic dividend.
A new loan facility tailored for female entrepreneurs was also launched at the Bank to empower Rwandan female entrepreneurs. The third product is targeting the country’s retired citizens allowing them to borrow against their pension in order to set up their own businesses. BK has also introduced Zipp card, a prepaid card targeting the lower income segment to enable them access financial services without necessarily having to operate a bank account in order to make financial transactions.
The Exceptional BK
In 2010, the Bank implemented a new customer-centered organization design and structure changing from the previous functional structure. The Bank is currently up skilling all staff in professional banking and also sponsoring them for English language conversion course from French after the admission of the country into the Commonwealth and integration into the East African Community. From a staff establishment of 303 the Bank had 454 staff as at 31st March 2011.
Bank of Kigali is the destination to every kind of banking related aspect and provides great products at your disposal. It is imperative also that the bank of Kigali has the interest of the Rwanda’s development at heart thus supporting each bit of economic growth financially.
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Banque Populaire du Rwanda

The neighbourhood bank with international acclaim
Facing competition head-on
Banque Populaire du Rwanda has a cooperative background with branches and outlets in rural areas. The branches are close to the people hence the tag “our neighbourhood bank.” Formerly with operations largely manual, provision of basic banking services was slow, bureaucratic and could take a lot of people to get services done.
To reposition itself in the increasingly competitive banking industry, BPR is automating its 190 branches and outlets throughout the country so as to provide faster service to its clientele.
“We are working at high speed to get all our branches and outlets on one central core banking system. When we are done, all branches are in communication with each other; that is the main challenge,” says Klaassen
BPR is also looking at Mobile Banking as a product/channel that will ease how banking is done. The mobile banking services will be expanded to include other suppliers. Soon BPR mobile banking will be able to send money to account holders in all other banks and all kinds of electronic payments will be possible to make through BPR.
Capacity building
Lack of qualified professionals in Rwanda’s banking sector is a challenge BPR is working hard to address. One strategy the bank employs is on-the -job training.
“We also provide them with additional training outside but to a large extent the real banking job is learnt in the bank itself. There are very few schools where you learn the day-to-day practical banking work; you have to do it here,” Klaassen says.
BPR employs about 1600 people. Its vision is that when people enter the bank they have more of a career in having a possibility of developing themselves and learning on the job.
Support to agriculture
The agricultural sector is the backbone of Rwanda’s economy and will be for the years to come. BPR is keen to play a very significant role in its development. The bank has a strategic investor; AAA rated RABO bank of the Netherlands which is an agricultural cooperative by origin. By having this expertise, BPR is better equipped to offer valuable services and add value to the sector. A large portion of the bank’s portfolio will be invested in this sector.
BPR will boost agricultural expertise in the different districts where it has branches and on a regular basis, these people will be trained and given the tools to transfer their knowledge to local communities in rural areas.
BPR of the future
Klaassen says: “The bank will be automated fully, with a large presence in the country and giving quick, efficient and best services to its clients at a low cost. It will provide all basic banking services of good quality to a very large public.”

BPR prizes itself in its customers. With 1.4 million customers, and counting, BPR also has the highest branch network of 190 and outlets. Another outstanding feature, BPR is now the most innovative bank in Rwanda. During the just concluded 14th International Trade Fair, BPR emerged as the “Best Exhibitor” in the Financial Services Sector.
BPR has the highest number of ATMs and cards and is expanding the feature of mobile banking to other frontiers that have not been seen on the Rwandan market before.
“The fact that you can use your account to send cash to your grandparent in Rusizi from an ATM in Rusizi BPR branch without a card is a huge accomplishment,” says Konde Bugingo, BPR Chief Operating Officer
BPR is working on a programme to modernise its services, commercialise fully in terms of IT services and service delivery. Bugingo acknowledges that more work still needs to be done as the bank transitions from a cooperative to commercial nature.
One of the key areas is the automation of branches. The bank has 190 branches and outlets from where all services can be accessed whether it is opening up an account or getting credit. The bank is currently undertaking a programme to make sure that all its branches and outlets are automated. From 18 in 2009, 40 in 2010 to the current 90, the bank targets to have 150 by the end of 2011 and all the 190 automated by mid 2012.
Automation means that the BPR is not only automating the branches by installing electricity and computers, but is also having a fresh re-opening of the branches. Staff members are trained on the new services on top of doing a complete rebranding of the branch infrastructure. In places where they have no access to the national electricity grid, solar energy sources have been installed.
“The branches are connected in terms of having real time access to information, they are hooked on to the main banking system and they do things in real time,” says the COO.
The bank is automating its services and clients should be able to access ATMs at any branch, check account balances using their mobile telephones from home and pay for other services like buying electricity, paying subscription for pay television and purchase airtime using the mobile banking service.
This automation enables clients to have a financial services platform in which they can use it to transfer money to other clients and in future they will be able to transfer money to people who do not have accounts with BPR or even own ATM cards. The bank envisages launching the service by the end of September 2011.
“You can do anything using your phone without coming to the bank. This is the vision we have and that is the competitive edge we have above everyone else,” says Bugingo, adding “the challenge is that some clients do not yet fully understand that they could do all this. We need a lot of education and promotions but we also need to make sure that systems are working at full time.”
BPR ATM cards can be gotten in 15 working days. A client pays Rwf2500 per year for a card that lasts for three years. These cards can be used across the country on ATMs from other banks. BPR has 40 ATMs across the country but the target is to have about 70 by the end of 2011 to enable customers access financial services at their convenience.
Konde says that BPR has all features of a modern commercial bank, a bank with the cheapest products in the market, where granting credit is a seamless procedure.
The automation project that started this year and is expected to be complete mid next year. Automation and rebranding will cost the bank over Rwf1.4 billion. All the branches in Kigali, Rwamagana and Rusizi are now fully automated. However automation comes with its own challenges. Konde says the bank is working hard to ensure seamless operations.
“Problems with internet connectivity still persist. Whenever we have problems with connection you find that our clients are livid but we are trying hard with our partners to make sure that connectivity is up and running,” he says.

BPR in the next five years
Bugingo says that BPR aims to be the number one retail bank of Rwanda. The bank plans to have close to 200 ATMs and half a million ATM cards issued and the number of clients using the mobile banking service is expected to grow to about half a million in the next five years.
The bank will launch Internet banking next year in line with the bank’s vision to establish channels that will assist in delivering services to its clients without them having to leave the comfort of their homes.
“We are going with the pace of the country to make sure that ICT solutions become the basis of service delivery through the automation of all services everywhere in the country. In future clients will have the possibility of applying for a loan of Rwf4 million for example over mobile banking or over the call centre. That will be BPR in the next five years in terms of service delivery,” Bugingo says.
BPR Call Centre
“The Call Centre phenomenon is new in the banking sector in Rwanda. BPR Call Centre has state-of-the-art equipment and is adequately staffed to serve as an interface between the bank and its clients. The idea behind the creation of the call centre is to attend to clients’ queries without them having to come to the bank. The centre handles complaints, compliments, whistleblowers and product information, etc.
Started in September 2010, the BPR call centre is open Monday to Friday from 8-9pm and on Saturday from 8-5pm. According to Irene Murerwa, the Call Centre Manager, the centre was planned to be the support channel for customers and other bankers for mobile banking. In its short span of existence, the call centre has proved a huge success that it has taken up more customer care related activities. The call centre has significantly grown in number of staff and activity.
The Centre, not only takes care of external customers but also the internal customers where it supports other departments internally. It deals mainly with the branches and sub-branches.
The volume of activity at the centre varies. Activity is at its peak during the salary payment period (end of the month). There is a high call volume as customers make transfers.
“We have an average of 25,000-30,000 calls per month. This is an impressive number. It shows that awareness is there, clients are happy with what the bank does, otherwise they wouldn’t be calling,” says Murerwa.
She adds that every customer complaint is taken very seriously and responded to within 24 hours. “We encourage customers to take advantage of the centre for any kind of information, we are ready to serve.”
Other products
In June this year, BPR launched a fast track loan for salary based earners dubbed ‘BPR Home Life Loan’ that is approved in 48 hours. A bank customer chooses the products s/he wants and brings the invoice to BPR. The bank will verify that one is an account holder with the bank and will also verify the client’s capability to pay back. After verification, the bank pays the invoice. The amount is deducted from the customer’s account in instalments.
“It is at the convenience of your living, you get the sofa and TV and the kitchen you wanted but you still pay a small amount of your usual disposable income,” says Bugingo.

Facts that Figure
Over 60,000 ATM cards have been distributed
70,000 transactions on ATMs have been registered per month,
350,000 transactions using mobile banking service have been registered per month
190 branches and outlets
1.4 million clients
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Banque Commerciale du Rwanda limited
BANKING THE UNBANKED

Transforming the economy and enhancing the
well-being of Rwandans
By Moses Kirui

No one loves a bank more than the bank that gives back- Say that three times fast! BCR is that kind of a bank offering amicable solutions and services to banking related matters. The bank has ensured full and reliable services to their esteemed customers in all areas that help in realizing the dream of Rwanda as a country and boosting the well being of the Rwandan population.
BCR aspires to be the most respected and leading provider of innovative financial services solutions in the region as they seek to grow the share holder value while playing a key role in transforming the economy and enhancing the well being of Rwandans. This and many other wonderful prospects by the Bank has seen it provide satisfactory services and products that serve best the interests of their clients and the interest of a modern and a fast growing Rwandan economy.
The bank has ensured tremendous performance through reinforcement of various processes that have encouraged reliable and cost effective banking at BCR ltd. With each passing moment, the bank has been the pioneer of almost all the banking solutions and products available in the country ranging from issuing the first corporate board, launching the leasing and mortgage products, introducing electronic banking, segmenting customer base with specialized sector relationship managers to setting up the first dedicated marketing department in the industry.
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BCR desirable growth and expansion.
BCR controls a significant share of ATM debit cards in circulation within Rwanda driving a high volume of card transactions that the Bank is looking to leverage on. To this end, BCR has commenced its 2011 network distribution expansion program that is aimed at increasing ATMs from 3 to over 25 countrywide by the end of 2011. With the establishment of more ATM’s, BCR has also successfully grown its debit cards by 80% during the first half of this year and is targeting to have slightly over 12,000 cards in circulation by end of year, says Isaiah. This expansion program enables BCR to enhance the service levels to customers, to provide outreach and a launch pad for growth into all customer segments. In our expansion strategy, two more outreach branches are planned before year end, Isaiah added.
BCR has remained well capitalized and liquid. It has achieved market leadership in product innovation, received recognition for excellent customer care, maintained the highest governance standards, made significant investments towards social commitment, and maintained the best human resource composition in the financial services sector.
BCR’s performance
In terms of financial performance, BCR has demonstrated good numbers over the years in revenue, profits, equity capital and assets. Its net profit increased
by more than 300% (from Rwf 900M to Rwf 2.7B) between December 2008 and December 2010. The bank’s return on equity has grown impressively as from 10% to 23% in 2010 while the cost to income ratio reduced from 89% in 2009 to 70% by end June 2011; one of the best in the industry. Generally in the last 18 months BCR achieved the highest positive growth when compared to the industry performance for the same period and despite controlled asset growth.
This year by June, the bank is already ahead of its budget which best describes a state of a stable and efficient bank amicably harnessing its abilities. The bank’s total assets have increased by 12% compared to December 2010. In this regard, as of June 2011, the bank’s solvency ratio has increased from 22.8% in 2010 to 26%. There has been a progressive improvement in its NPL ratio resulting in a good loan book. This is a reflection of our improved credit risk management, Isaiah added.
BCR’s Incredible Services and Facilities
BCR in a bid to maintain and improve on their service delivery has put in place initiatives that are unique and efficient promoting effectiveness attaining its objectives. The bank has recently upgraded its core banking system and technology platforms in order to efficiently provide modern banking services. Some of the upgrades include:
In 2010, BCR achieved an upgrade of its core banking system. This is a state of the art banking system which pro¬vides advanced services such as straight through processing (STP).
This system upgrade has provided Swift integration capabilities that have reduced / eliminated manual transaction duplication. This ensures that the bank’s front line services as well as backend operations are faster, accurate, consistent, and have the capability to handle increased volumes.
BCR is one of the few banks to have a fully-fledged, operational and independently tested IT disaster recovery site and Business continuity plan in the financial services sector.
Transactional E-Banking
As a result of BCR’s systems capabilities, the bank’s customers will soon have upgraded electronic banking to remotely access banking services via internet and mobile for both enquiry services as well as transaction initiation capability. The system shall also provide tailored email and text message alerts to enable clients keep track of their transactional activities on their accounts.
Over and above the ability for one to make utility bill payments and purchase airtime through our electronic banking proposition, our customers are uniquely able to effect; funds transfers to their own accounts within BCR as well as make funds transfers to accounts in other banks (whether their own or belonging to another individual).
Your financial needs met through BCR’s innovative products
BCR has put in place new products that are targeted at serving the specific needs of corporate dealers along the business value chain (both upstream & downstream). BCR is the first to introduce structured facilities for dealerships in the Rwandan market.
The bank was the first to propose retail products wholesale, offer a customized mortgage facility at competitive terms with a tenor of up 20 years. This has allowed individuals with low level income to access the services.” said Faustin Byishimo, BCR Head of Retail Banking.
The bank has reduced its down payment on mortgages from 30%-20% in a bid to encourage balanced development growth that will include everyone regardless of their status, the bank has increased the tenor for construction loans from 7 years to 15 years. Repayment capacity for home loans has also been increased from 30% to 50% hence easing accessibility of the product to many, said Byishimo.
BCR has actively engaged existing corporate customers in providing customized bank¬ing propositions which benefit their employees through the BCR @ WORK offer. This is a customization of retail bundled products and services that are there to promote the well being of a given employee in an organization.
Faustin Byishimo also added that the bank’s strategic intent, through this initiative is to deepen their existing relationship with their corporate clientele, whilst providing retail banking solutions that meet the needs of their employees.
The bank has also promoted home loan offers to their clients; it is the only bank that has highly differentiated its mortgage facility to cater for the different needs of customers. The bank’s home equity product is unique in market. It allows customers with an existing property to capitalize on it to finance their other needs; it is flexible and creates more avenues for improvement on the client’s part.

BCR fuels government’s development agenda
Following the economic growth in Rwanda, BCR is providing financing for new market segments such as Ag¬ricultural and Energy sectors and accounting training to the SME’s.
Building in-roads into new market segments
Efforts are already underway to extend credit facilities into the Tea and Coffee growing segments – currently with as high as Rwf 6.7bn ($11m) exposure and expected to increase by the end of the year.
BCR is presently facilitating the Rural Electrification Program under EWSA (both power distribution and generation) as well as extending credit facilities to key private investors that are setting up electricity production plants. The combined exposure on this is presently as high as $5.5m, with another $4m having been earmarked for a project in pipeline to develop renewable energy sources in Rwanda.
BCR is the first ever bank in Rwanda to provide financing options that suit the needs of investors in this sector.
The Government of the Republic of Rwanda also set up a development fund guarantee that is aimed at providing financial solutions to SMEs in Rwanda. BCR is one of the financial institutions that qualified to actively participate in this development fund guarantee. In addition the bank has contributed actively in SME em¬powerment and development through SME accountancy skills training in partnership with the German Development cooperation. The bank has also donated over Rwf5m to the Nyakatsi and Girinka projects. The staff also actively participated in community initiatives like contributing to poverty alleviation through the Girinka and Nyakatsi programs.
SME accounting skills training
A study by the Private Sector Federation (PSF) has revealed that 55% of SMEs interviewed consider preparation of financial statements, tax regulations, and by extension, accounting and book-keeping to be their most hindrance to their business thus slowing the growth of Rwandan economy in general and their business in particular.
This year Banque Comerciale du Rwanda limited (BCR ltd) launched a Corporate Social Responsibility of training 200 SME enterprises. In the first two sessions that were conducted in March and July respectively, over 100 SMEs were trained on accountancy skills ranging from basic book keeping skills, preparing financial statements, taxation, financial management skills to loan documentation. This Project is as a general advisory to our esteemed companies and non customers. This Project is also driven by the fact that the SME sector is the biggest sector of Rwandan Economy with a high trend of growth. SMEs constitute 60% of BCR loan and deposit book.
Our Human Resources & Corporate culture
Apart from these magnificent products and services, BCR fully enjoys its dynamic culture and services of the equipped, vibrant and skilled young professionals entirely made up of a multi-discipline team comprising of Top and Middle management majorly from Rwanda.
“Everywhere you go you will find an employee originally from BCR because it is here that services meet reliable skills, we are one of the major suppliers of profes¬sional human resources to other corporates” asserted Faustin Byishimo, BCR’s Head of Retail Banking
An access to BCR makes one feel deservedly served having played a pioneering role in bringing new products into the market and utilizing them with the tireless toil of local skills rather than exper¬tise from outside Rwanda. BCR endeavors to serve its customers with the most innovative products in the sector, thanks to its vibrant team and culture.
Faustin added that the bank is also planning to continuously remodel its product portfolio to keep them client-friendly and invest heavily in elec¬tronic delivery channels as it aspired to reach more Rwan¬dans. It is evident that BCR is out and out for sure to bank the Unbanked.
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KCB Rwanda serves and works with its customers

KCB is regional in character, universal in products, and with a thick footprint across the East African borders, a combination that makes it the number one financial partner for businesses and individuals who see the financial lattice and services with a keen eye. The New Times’ Thomas Kagera talked to the Managing Director, Maurice Toroitich, to have an insight.
KCB Bank Rwanda is a subsidiary of Kenya Commercial Bank Ltd which is a company that is publicly owned and quoted in the Nairobi, Kampala, Dar es Salaam and Kigali Stock exchange. The operations of KCB date back to 1986, when its predecessor, the National Bank of India opened a branch in Mombasa and later spreading wings into Nairobi and later to other major towns of Kenya.
KCB today has opened shop in four of the five countries in East Africa; Kenya, Uganda, Tanzania and Rwanda. The bank also has branches in South Sudan. Plans are underway to set up presence in Burundi, thereby completing the EAC circuit.
On the whole, KCB has 222 branches in the region, supported by 928 Automatic Telling Machines (ATMs)—those that are KCB owned and others accessible through partnerships. A KCB customer can therefore access their monies in East Africa, at any of the 222 branches and 928 ATMs.
KCB Rwanda was established in 2008, so this is the third year of operation here. KCB so far has 9 branches countrywide and a network of 14 ATMs and looking forward to expanding extensively in the country through additional branches and non-branch customer outreach. The KCB Rwanda customer base today stands at about 40,000.
KCB already offers customers convenient facilities that enable them to transact on their accounts through the telephone, internet—so that they can access or transact their accounts from any part of Rwanda, and or the world in case of internet banking. To ease further the delivery of financial services, the bank is also working with cooperatives and non-bank financial institutions as agents for money transfer services such as Western Union and Moneygram.
The Bank is also looking into Agency Banking as a means of accelerating financial inclusion in Rwanda where KCB has no branches or where there is no critical mass that would profitably support a fully fledged operational branch.
Products
KCB Rwanda is pursuing a universal banking strategy that offers all solutions to the entire customer spectrum in line with the vision of being the preferred financial solutions provider in Africa with Global reach.
Lending
As far as lending is concerned, the bank offers various types of credit programs in to serve needs in various categories of the economy such as; infrastructure; trade and commerce; home ownership; Assets acquisition(vehicles, machinery etc); Agriculture and personal banking.
The mortgage product that was recently launched has been very attractive and has seen very positive responses from customers and there has been a big growth in the mortgage portfolio since we launched.
KBC Rwanda launched its mortgage financing business early this year with a financial outlay of Rwf 7b. The product is expected to address the high housing deficit in the country both from a demand and supply perspective. It is estimated that Rwanda needs between 20,000 and 25,000 residential houses every year, however, only about 300 are provided. So KCB Rwanda will help narrow the deficit through it’s mortgage program.
We have steadily invested strongly in products and services that add value to our customers,” the statement reads.
Overall the bank operates a needs based policy in its lending programs whereby If customers need the support of the bank, we work with them to design a solution that fits their requirements. KCB Rwanda has already entered into an agreement with rice farmers in Kamonyi District to help increase production and the bank has already handed over loans of Rwf 150 million to Rice Growers through their Cooperatives.
Payments
KCB Rwanda offers a wide variety of current account services, money transfers by swift or normal electronic funds transfer within Rwanda or any other part of the world.
We also facilitate funds coming in through the clearing system from other banks—monies sent in by families or under other trade obligations.
Other services offered by the bank are specialized money transfer services such as Western Union and the MoneyGram transfer services, and self service banking that allows transfer of money from one account to another from the convenience of their business premises or homes.
KCB offers savings and investment accounts. But one unique product to note here is that KCB is the only bank in the region that has custodial services unit which facilitates investors. It facilitates trade and settlement of payments for securities in the stock exchange. So we hold assets for our customers and facilitate the settlements when they buy or sell. KCB, especially, works with foreign investors in the Stock Exchange market operations in Rwanda.
One people and universal services
There is no other bank in the region with a banking platform that is fully connected as that for KCB. So a customer in KCB Rwanda can go to any KCB branch in the region and enjoy any services that he/she would enjoy at the home branch. In other words our cross border customer care stretches across all our branches is uniquely the best and the same.
For all these services, KCB charges very modest fees, but gives you very comfortable, fast and efficient services. A businessman from Kigali going to Mombasa, for example, does not have to carry huge sums of money as he/she is certain of having access to one of the many branches strewn across the route to the coast.
Our ATM network has got the best performance in the region in terms of availability with an uptime of 98%, i.e. of that time the customer will be able to access his account.
Supporting our clients grow
KCB Rwanda supports customer associations to enable them interact, share ideas and experiences as well as engaging them in forums that make them understand and operate their businesses better. There is, for example, the Biashara Club that engages members in trips to countries like China so that they can learn the best business practices, and also to exp that present them to a wide variety of opportunities.
There is also a Homeowners Club, for the people who have taken mortgages through which our customers network, build their own knowledge and understanding of the property industry.
KCB works with other partners such as the International Finance Corporation (IFC) to propagate business education and best practice such the SME toolkit training, a business management system that IFC has designed and we have helped in funding part of the training costs because one of our Corporate Social Responsibility is to promote entrepreneurship.
KCB SME, Mortgage folio boosted
KCB Rwanda has received a USD 5 million loan from the World Bank’s private lending arm, International Finance Corporation (IFC), to support its mortgage lending business. This is part of a wider program that IFC has approved to support KCB Group operations in Kenya and elsewhere in the region.
The financing will also support the growth of the bank’s Small and Medium Enterprises in Tanzanian, Rwandan, South Sudan and Ugand

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