Rwanda: Banking in Country - From Exclusive Individual Clubs to Serving the Masses

George Kagame23 October 2007
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Kigali — A banking hall of the Housing Bank in Kigali. Most banks have adopted ICT to reduce congestion.

From the 1920s under the Belgian administration, the monetary and banking systems of Rwanda and Burundi were integrated with those of the Congo.


This state of affairs did not practically change till after 1994, the only interruption being the robbery of the Central Bank during the 1994 war. The monetary sector of Rwanda did not really make a significant impact on majority of Rwandans. Many described the sector as an 'exclusive for individual clubs'. Today the impact of the monetary and banking business is being rejuvenated at a breakneck speed. Not only has the economy expanded, but many of Rwanda's commercial banks have been taken over by 'strong' investors, thanks to good leadership and regional intergrations.

"We were even able to make profits during our first year and even introduced new products," David Kuwana the boss of Rwanda Commercial Bank proudly says.


With the recent developments in the banking sector , more Rwandans have started saving, the monetary sector has expanded. "From January to August 2007, Banque de Kigali (BK) has registered increased account holders by 1,681 clients. BK is encouraging its clients to save (more), because when they save there's capacity to borrow, and this will increase their capacity to invest. He adds: "We encourage people to have long term benefits, where we can give interests- for example BK gives 9 percent on a year-saving-scheme. With inflation, he says his bank adjusts to demand by reducing costs such that savings can go to clients.

David Kuwana, the Rwanda Commercial Bank (BCR) managing director says the privatisation of the banks was important. BCR was able to reset. And, today it is run like an international bank. Kuwana says the coming of Ecobank, Access Bank and the other international banks is not a surprise. "The takeovers are good for the country because it brings a variety of experiences and a new banking culture," he says.

Like hawks, leading banks are presenting very ambitious commitments. Many of these commercial executives have mastered government programmes like the Vision 2020, Economic Development and Poverty Reduction Strategy (EDPRS).

They have also grasped various government reforms while talking to their clients. Their talk is interjected with anacetodes of political programmes meant to get as many people out of poverty as possible.


Jacky Kayiteshonge of Bancor says, "It is the stability not the resources of Rwanda that is attracting investors. They want to take advantage of the region, Rwanda has become a key player in the region." He says at Bancor, they simplified banking and taken services closer to Rwandans. Banque de Kigali has taken on Rwanda's ICT infrastructure to serve their clients better.

"BK has set out to reduce inconveniences in banks. We want to reduce long queues in banks in banking halls," Gateera says. ICT will allow a customer to carry out bank transactions from the comfort of their homes by use of internet. The bank is also issuing VISA Cards, which is credit to travellers.

They can easily pay back at their convenience and reduces risks of carrying cash. The entry of international banks is a vote of confidence in Rwanda's stability and the benefits of Rwanda's joining the East African Community. Many of the banks entering Rwanda's market have had their operations in the region for years. And their recent entry into Rwanda is seen as an attempt to scout for opportunities in the now enlarged East African Community. "I think it is a healthy development because of the new players.


Banks will offer better services, make more business because of increased capital and competition. New players are bringing in new ways of doing business. This is therefore a good thing", says Consolate Rusagara, the vice Governor National Bank of Rwanda (BNR). The crucial sectors that Rwanda's commercial banks intend to exploit and help expand include the coffee, tea, horticulture and the tourism (eco-tourism, hotels and restaurants, leisure activities) sector.

Others include: The manufacturing, ICT and telecommunications, energy and finance. Rwanda's economy is predominantly agricultural. The sector contributes over 40 percent of the country's GDP and employs nearly 90 percent of the workforce. Coffee, tea, fresh fruit and vegetables, cut flowers and pyrethrum are the main export crops. Coffee and tea account for more a large part of the total agricultural export value. "We are looking at rice driers, agro based vehicles as a potential intervention to help our clients in the agricultural sector," Kuwana says.

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While BK's Gateera says they are increasing the amount tobe lent to the agricultural sector. The Housing Bank is currently seeking to increase its share capital which offers opportunities for institutional and private investors, both local and foreign. Private-sector participation is crucial for the further development of the housing sector in Rwanda, and the high demand for housing in Rwanda also provides opportunities for estate and property developers.

The main sectors and industries targeted by the Government as engines of future economic growth include ICT, construction and property development, manufacturing, horticulture, coffee, tea, crafts and tourism and, to a smaller degree, textiles and apparel.

With the possible exception of textiles and apparel, all of these sectors have significant potential for growth and are likely to be among the main engines of Rwanda's future prosperity.