Barclays eyes BK

The government of Rwanda is in the process of selling at least 70% of its shares in Banque de Kigali to Barclays Bank.

“We are now engaged with Barclays bank and we hope to conclude this exercise in June,” Rwanda’s Finance Minister, Mr. James Musoni said recently. According to the minister, negotiations are well into the due diligence stage.

The deal comes over two years after the government increased its shareholding in Banque de Kigali from 36.5% to almost 99.8% after repurchasing 50% shares owned by Belgolaise, a Belgian bank that pulled out in 2005.

Its gross income increased by 20.8% from Rwf9.9bn ($18.3million) in 2006 to Rwf12billion ($22.1million) in 2007. Banque de Kigali closed 2007 with an increase of 44% in net profit from Rwf2.9bn ($5.4million) in 2006 to Rwf4.2bn ($7.8million). Deposits increased by 47.6% from Rwf69billion ($126.8mn) in 2006 to Rwf101.8bn ($187.1mn). Total loans in the year in question increased by 28.6% from Rwf37.8bn ($69.5mn) in 2006 to Rwf48.6billion ($89.4mn).

The Barclays team was in Kigali in the beginning of the year to assess the banks position.

If the deal is successfully brokered Barclays PLC, the third largest bank in the United Kingdom PLC and among the ten largest banks in the world by market capitalization ($94.79 billion), would be the fifth foreign bank to enter the Rwandan banking sector. Other foreign banks currently active are Actis, Access, Ecobank and Fina bank.

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BCR heralds the growth of Rwandan Small & Medium Enterprises

By Patrick Mutimura Rising from ashes to glory, turning straw to Gold, are all expressions that would describe BCR’s evolution after privatization and small and medium enterprises’ transformation into the driving force of the Rwandan economy and post ’94 Rwanda in general. When BCR was privatized, ACTIS, the Government and Rwanda and its minority shareholders had one vision: BCR was going to be the most respected bank in the country.   The bank was also going to be at the forefront of the country’s developmental agenda. With this in mind, it was understood that it was going to be “Business Unusual”. 

A Great Bank facilitates other Businesses to become Great Businesses 

In order to succeed as a business, BCR had to carefully segment the markets it was going to serve, increase customer focus, innovate and return to profitability. The Small and Medium Enterprises (SME) market was a natural selection. It is growing, active and has enormous room for expansion and is a market with a clear need for what the bank offers – business growth financing.  

BCR Launches SME products

In order to facilitate SMEs to increase their volume of business, BCR, in the past two years, has developed products that have revolutionized SME business financing, and other banks have followed suit. Lease and Go, BCRs leasing product is a prime example. With Lease and Go, SMEs that could not obtain assets under ordinary financing now acquire them as leased assets, pay for usage and receive tax benefits, as the rentals are tax deductible.  

PhoneBanking is another service worth mentioning which SMEs have taken up quite well. It is convenient and customer-driven.  Simply put, it is the bank’s enquiry desk accessible to you, wherever you are. SMEs can inquire whether a payment has been made or received without leaving their business’ premises. They can stop payments (prevent the holder of an issued check from making withdrawal) as well as speak to the agents regarding any issues they would want to raise with the bank.  

BCR also intends to play its part in developing entrepreneurship in Rwanda, and in the process, increase the number of SMEs operating in the country. This is the essence behind Credit Éclair – a fast, no frills, no hassle loan facility that allows salaried employees to obtain quick financing to start a small business and find alternative earnings. 

Easing SMEs ability to grow through tendering is also one of the means by which BCR is facilitating SMEs in Rwanda. With Tradeline, a short term loan facility, a trader who is awarded a tender approaches the bank and is provided up to 70% of the financing required to deliver on the tender.   Tender approval acts as security. This is business made simple and the new approach to banking. 

Insurance Premium Finance (IPF) is another SME loan facility. IPF allows businesses to pay insurance premiums on machinery and equipment, imported and exported products as well as all insurable items. This is done in installments rather than up front cash, which provides flexibility in cash flow management. 

Going Forward

BCR prides itself in offering the SME sector business-needs oriented products, coupled with world class service. Being crowned the London Based Financial Times Banker of The Year 2006 and 2007 (Rwanda) confirms that BCR is well on its way to attaining its vision. Successful businesses usually have the support system of great partners. This is true for BCR and the SMEs they support.   There is a mutual respect of interests and a mutual desire for each others’ progress. The bank will continue to innovate and find ways of helping SMEs achieve their potential as businesses and development agents in the country. 

The Small and Medium business’ role is simple: they have to improve the management of their businesses which, will reduce their risk profile, and improve their processes and productivity level. This is geared towards ensuring that their growth is inevitable, given the virgin nature of the majority of business sectors in Rwanda.  

West African Banks enter Rwandan market

West African Banks enter Rwandan market

By Babu Emile

Experts predict an improvement in the quality of financial services and banking products that will ignite a highly competitive financial sector following the entry of West African based continental banks into the Rwandan banking arena.

On the 6th of July 2007 Ecobank officially took over ownership of Bank of Commerce, Development and Industry (BCDI) to create Ecobank Rwanda. This development follows the sell of 75 % shares of BANCOR SA. to yet another West African banking giant, Access Bank. Continue reading

Business Success: BCR’s story!

Business Success: BCR’s story!

 

Coming up from near collapse, BCR suffered very poor performance following the 1994 genocide. In quick genius, the government of Rwanda offered it for privatization. The outcome is arguably the most successful privatization deal so far.

At privatization, government aimed to improve BCR’s financial performance and attract an internationally recognized shareholder. Actis, a private equity investor took on the challenge seeing the business potential in BCR. By the end of 2004, Actis had sealed a deal that saw it walk off with 80% controlling interest in the bank. This ground breaking investment was the first major privatization deal in post genocide Rwanda. This year as BCR celebrated a registered 101% profit from Frw 1.04 billion in 2005 to Frw 2.1 billion, the benefits of privatization are clear. Continue reading