IN NOVEMBER, the banking sector will witness another milestone as Atlas Mara Ltd takes over the commercial division of the Development Bank of Rwanda (BRD).
Rwanda’s banking sector is attracting new investors largely because the economy continues to post strong growth, even during the hardest of economic times.
And a robust finance sector is perhaps the best yardstick to measure soundness of any economy, because any banker worthy their money will head where there is potential to make more money.
So, the coming of Atlas Mara Ltd, and those before it, is testimony that there is money to be made here; and should remove any lingering doubts in the minds of those potential investors still sitting on the fence.
As finance minister Claver Gatete has often stated, Rwanda’s banking sector will remain open to all serious players with new products that feed into national financial sector development goals of deepening financial inclusion by taking services to unbanked Rwandans.
So, we learn that Atlas Mara Ltd is not only coming with the much sought after Foreign Direct Investment, but also with expertise and innovative ideas from one of its promoters, Bob Diamond, the former group CEO of Barclays Bank Plc.
Unbundling BRD into two entities (development and commercial) should therefore bring about efficiency and remove ambiguity in the operations of a bank whose known historical mandate is to provide cheaper and long-term development funding to critical sectors of the economy.
For example, while commercial banks have largely shunned lending to agriculture, the main economic activity because of perceived high risks, BRD has pumped resources into coffee, tea, food crops and livestock. Stakeholders need assurance that returning the bank’s focus to its core mandate will make things even better.