Zigama Co-operative and Savings Society (Zigama CSS) customers could soon start enjoying a low interest rate after the bank’s board expressed willingness to review the current interest rate, James Ndahiro, the board chairperson, has revealed.
The development follows complaints from members about the high interest rates charged by the bank.
Zigama CSS charges 15 per cent interest annually, which members say is too high. The rate is, however, lower than the market average of close to 18 per cent levied by commercial banks.
Ndahiro said the board is considering requests for a lower interest rate, arguing that the bank’s members are among the lowest income-earners in the country.
The institution has close to 70,000 account holders, most of whom are officers and men from the army, police and correctional services.
Ndahiro was addressing reporters at the bank’s annual general meeting at the Ministry of Defence headquarters in Kimihurura, Kigali on Thursday.
He said most of the members and their spouses borrow money to engage in income-generating activities, pay for their children’s school fees or build houses.
“They, like any other Rwandan, want to improve their living standards,” he said.
According to Ndahiro, Zigama’s loan book grew to Rwf87 billion last year, while its total assets expanded to Rwf136 billion.
He added that the financial institution’s net profit increased by 32 per cent to Rwf4.6 billion, from about Rwf3.5 billion.
“We have reduced our non-performing loans to less than the central bank’s minimum requirement of five per cent,” he noted.
Army spokesperson, Brig. Gen. Joseph Nzabamwita, said the bank prioritises clients’ welfare and better service delivery than the profit, unlike commercial banks.
“The aim of this bank is to enable us (soldiers, police officers and prison officers) to solve problems jointly. This is why we don’t open the bank’s doors to civilians, and work like a commercial bank,” he said.
Zigama CSS was established in 1997 with the main mission of improving the welfare of soldiers and their families.
In 2011, it received a banking licence from the central bank and, since then, the co-operative bank widened its membership to include the Rwanda National Police and Rwanda Correctional Services personnel.