Kenya’s Equity Bank to double Rwanda portfolio, target SME lending

President Kagame pauses for a group photo after meeting EQUITY group’s Board of Directors

President Kagame pauses for a group photo after meeting EQUITY group’s Board of Directors

Equity Bank Group – East Africa’s large financial institution says it is overwhelmed by the rate at which it has penetrated into the Rwandan market, two years after opening shop in the Country and promised to double its investment in the country

This was announced by the Bank’s CEO, James Mwangi, shortly after meeting President Kagame at his Rugwiro office in Kigali on Tuesday.

According to Mwangi, the Bank has been successful and it attributes the success to Rwanda’s will to ease processes for foreign investors.

The CEO, who led a delegation of the Bank’s Board of Directors who are in a retreat in Kigali said that their visit to state house was to thank President Kagame for his immense support during their two years stay in the Country.

“We wanted to update the president on our operations, but more importantly to seek his guidance and inspiration on the areas of focus that he would like the bank to support. We agreed that areas to develop are the business, real estate and manufacturing sectors,” said Mwangi

Promising bigger investment in the country

As a result of a successful turnover in the last 24 months of its operations in Rwanda, Mwangi told Journalists that the Bank looks forward to double its capital base and use its bigger balance sheet in East Africa to finance projects in different sectors of the economy.

“We intend to use the bigger East Africa group balance sheet in order to be able to do a single lending limit of up to $150 million to each venture, which will be sufficient to support development of the country without loan syndication,” he said.

In addition to this, Mwangi added, the Bank will continue emphasizing on becoming a leader in promoting technology in the Banking sector in Rwanda.

“We want to continue promoting the use of Information Technologies (IT) in banking here and the agency banking model which enables us to reach the rural areas.”

Succeeding in retail Banking

One of the secret behind the Bank’s success in Rwanda has been the philosophy of retail banking approach. According to Mwangi, the Bank has been able to acquire a sizable number of agents using the approach.

“Today we have 700 banking agents countrywide who do about 10,000 transactions per day. Our goal is to grow volumes in lending rather than increase profit margins. You don’t need to retain huge margins to recollect the same amounts of profit. You just need to increase the volumes,” he observed.

In a period of 24 months in Rwanda, according to the Bank’s CEO, its customer base has hit 350,000 clients.

Mwangi said that they will continue to work closely with the government of Rwanda to further steer development.

“We will work closely with the government to ensure that the micro-economic environment supports and sustains low interest rates on credit.

In an interview, Finance and Economic planning Minister, Claver Gatete said that the Bank’s focus is on financial inclusion.

The bank will tap on the use of IT to encourage a cash-less economy which would in turn lead to more money retained in the banking system to be lent out to the private sector at lower interest rates.”

Moving towards E-banking era

According to Mwangi, the Bank is set to maintain its lead in introducing further high-tech banking systems.

“We have also been able to deliver on the promises we had made particularly on the payment systems by installing Master Card, American express, JCB of Japan and China Union pay cards. We had also promised that we would deliver banking services to the people in the villages by using the agency banking model.”

According to Minister Gatete, the Bank has been working to ensure that every payment is done electronically such that more money remains in the banking system so that there is more to lend out.

“Their introduction of the 11 cards has enabled everyone including visitors coming into the country not to carry cash and the more they can do that in terms of encouraging financial inclusion, then we will see more money in the banking system to lend out at low interest rates,” he said.

During their meeting, the Bank’s CEO and his delegation agreed with the president to always share the progress of their investments in the banking and other sectors in Rwanda’s economy.

The president pledged his support towards them.

Apart from Kenya and Rwanda, Equity Bank Group operates in Uganda, Tanzania and South Sudan.

With the launch of the instant ATM issuance programme at all its local branches, Equity Bank customers will now be provided with the regionally acclaimed Equity Bank Autobranch Visa Cards, according to the CEO. The instant issuance now places Equity Bank Rwanda in a unique league as it becomes the first bank in Rwanda to issue ATM cards instantly.

The Equity Autobranch Visa Card has the Europay, MasterCard and Visa (EMV) technology which authenticates credit and debit card transactions and also ensures the security.

Equity Bank Group of companies includes Equity Bank-Kenya, Equity Bank-Rwanda, South Sudan; Tanzania, Equity Bank Uganda, Equity Consulting Group Limited as well as Equity Insurance Agency Limited in Nairobi, Kenya.

Other Companies affiliated to the Bank include Equity Nominees Limited, Equity Investment Services Ltd; Finserve Africa Limited as well as Equity Group Foundation.

 

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About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

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