Rwanda’s financial sector witnessed the most exciting stage in 2010 following the outstanding reforms carried out as well as the developments that are in the offing, according to industry experts.
While speaking to Business Times ahead of the New Year, the bankers said that in 2010 the industry embraced new technologies while at the time banks were also on a big drive to establish new branches, which enabled them to think of new ways of doing business.
“This is a very exciting and very dynamic times for the banking industry. For instance we were able resolve the ATM network challenges, which enabled us to boost our payment systems. Along the way we instituted real time settlement systems, which are pointers of the deepening that has been done. Solid foundations have been laid and my senses are that very early next year we are very likely to see a quantum jump in service offerings within the entire sector,” Sanjeev Anand, the Managing Director of Rwanda Commercial Bank (BCR) said.
Other new service provisions which bankers said that pointed to exciting times was the establishment of the first ever credit reference bureau that is meant to boost risk management within the sector.
For KCB Rwanda, the year 2010 has been more about getting to learn the local terrain.
“This year for us has been a steep learning curve in terms of getting to understand the needs and expectations of our customers due to the fact (that) we are Rwanda’s newest bank,” said Maurice Toroitich, the Managing Director KCB Rwanda.
“For us next year it will be about better service delivery as we are now known to be very bullish and proactive. We expect to hit our target of growing our current market share of 7 percent to higher levels next year.”
However, adoption of new technologies by the licensed players along with a steady increase in their branch networks can be said to be some of the key strategies that the local banks re employing, ahead of the anticipated competition from new layers likely to gain entry starting early next year.
Buoyed by Rwanda’s larger reforms in Doing Business and a favourable investment climate, a new lot of fresh entrants comprising Kenyan brands and others from the southern hemisphere such as Nigeria, are expected to come in starting early next year.
In an economy where more than 80 percent of the population is still unbanked, the entry by new players, who will come in loaded with big time cash and expertise, will signal a new era within Rwanda’s financial sector.
Information from Ministry of Finance and Economic Planning indicates that while the local banking industry has undergone substantial reforms with assets in excess of $1 billion and equities surpassing $200 million, the sector still suffers from limited product range of services leaving a very wide room for new entrants to gain entry.
Analysts are now saying that the banking sector in particular will be a critical facilitator in the actualisation of government’s ambitious economic transformation agenda for the next seven years.
The coming of age of the East African Community (EAC) has enabled some of Kenya’s leading banking institutions to spread out strategically into the region. Among such banks eyeing Rwanda is Equity Bank ranked number 103 in the roster of top 200 banks in Africa and Diamond Trust Bank ranked 136 in the continent. Diamond Bank of Nigeria ranked number 48 in Africa is also setting its eye sights on Rwanda.