A team of experts from the International Monetary Fund (IMF) and the World Bank are in the country to assess the stability and performance of the financial system as a whole under a program referred to as Financial System Stability Assessment Programme (FSAP).
This follows the initial assessment done in 2005 that led to the development of the current compreh ensive Financial Sector Development plan.
In an interview with Business Times on Tuesday, Ambassador Claver Gatete, the Vice Governor of the central bank noted that the assessment will be carried out in three weeks.
“They will be meeting all stakeholders in the financial sector and we shall discuss their findings after.? We want them to give us an independent evaluation,” he said.
Gatete also observed that while the exercise will consider cross cutting issues, assessing the country’s financial stability, supervision and risk management are top on the agenda.
“This time it goes beyond what we do as central bank and looks at all the stakeholders. This will help us to come up with programmes such that each stakeholder implements their role and make sure all the recommendations are implemented,”
The Vice Governor also said the experts will be assessing the country’s securities and capital markets with the fully fledged Rwanda Stock Exchange yet to be operational.
According to the 2005 report from FSAP,? Rwanda’s financial?system is shallow and dominated by a small number of banks.
The report also indicated that credit to the economy was concentrated in Kigali and to few sectors.
Agriculture, by far the largest sector of the economy, the report said, received only 2 percent of direct bank credit in 2003, although it benefits from indirect credit from intermediaries.
However, according to Gatete the financial sector has since undergone transformation with new commercial banks being established and reforms implemented.
“Many things have changed. At that time it was a different financial sector, most banks were small; now we have new banks including regional banks, regulation of the insurance sector- but we do not want to (do) a self assessment,” he said, declining to comment further on the financial sector reforms that have been carried out.
According to a recent IMF report on the strengthening financial stability and deepening financial markets, government is on track to complete the planned number of on-site bank inspections.
“However, the high turnover of trained bank examiners continues to weaken the supervisory capacity at the National Bank of Rwanda and remains a potential source of vulnerability.”