The National Bank of Rwanda is in the final stages of licensing a Kenyan bank, Commercial Bank of Africa (CBA), to operate in the country as a micro-finance institution.
According to central bank governor John Rwangombwa, they are in the final stages of approving the bank’s operations in the country.
Following the licensing and clearance, the bank is likely to begin operations in 2017, further increasing the number of financial sector players in the country.
Kenya Commercial Bank-Rwanda and Equity are the other Kenyan banks operating in the country.
To operate in Rwanda, a micro-finance bank is supposed to have a minimal capital requirement of Rwf1.5 billion, while a full-fledged bank requires Rwf5 billion.
This, experts say, is a sign of confidence in the local market and proof of the numerous opportunities present.
CBA was founded in 1962 in Tanzania but moved its operations to Nairobi, Kenya, when Tanzania began the nationalisation of private banks in 1967.
The bank currently has presence in Kenya, Uganda and Tanzania.
In recent years, CBA has been seen to embrace innovation through multiple products and expansion across multiple markets.
The bank’s entry into the market follows that of another regional Bank of Africa into the Rwandan market after buying a majority share in Agaseke Bank.
The banking industry is also anticipating the coming of a Moroccan bank, Attijariwafa Bank, which is in the process of acquiring a 76.19 per cent share in Cogebanque at $41 milllion.
Attijariwafa Bank was established in 1904, and with offices in London, Paris, Brussels, Madrid, Barcelona, Milan, Shanghai, The Netherlands, Tunisia, Senegal, Ghana, Mauritania and Mali, the bank brand brings in experience of over a century to the local banking sector.
According to figures from the central bank, assets of the financial sector continued to grow in 2016. In the banking sector, assets registered an annual growth rate of 9.8 per cent by September to Rwf2.2 billion.
The banking sector’s net profit dropped in 2016 standing at Rwf32 billion, which is 2.8 per cent lower than Rwf33 billion registered in the same period in 2015.
Going forward, there are high expectations that the central bank will serve a great deal to finance the economy.
To facilitate that, the central bank Wednesday announced it had revised downwards the key repo rate from 6.5 per cent to 6.25 per cent to increase lending to the private sector and support economic growth.
Industry players say that by revising the bench mark rate, the central bank shows keenness in having more liquidity injected into the economy to stimulate investment and growth.
©Alleastafrica and The New Times