As the budget day draws near, The New Times will for remaining days publish views of the ordinary Rwandans on their expectations in the forthcoming budget that will be presented to Parliament by the finance minister on June 12 (Tomorrow). Today, bankers tell us why they want tax waivers

The government should put in place more tax waivers in the 2014/2015 budget to encourage long-term lending to the private sector, commercial banks have said.

Speaking to Business Times in an interview Sanjeev Anand, the chairman of the Rwanda Bankers’ Association, said there is need to encourage long-term lending to facilitate business growth in Rwanda, particularly supporting the real estate sector.

Currently, a few commercial banks and the Development Bank of Rwanda are offering mortgage loans at interest rates averaging 18 per cent, which borrowers say are prohibitive in terms of the cost of servicing the loan.

Anand suggested that some sort of long-term funding should be introduced by the government to promote more mortgage financing.

Jean Claude Karayenzi, the managing director of Access Bank Rwanda, urged the government to reduce the tax on saving deposits interest to increase customer deposits.

"Such tax relief would encourage more savings, enabling us to lend more to the private sector,” he explained.

Meanwhile, Anand lauded the government’s implementation of the winding 2013/2014 budget, saying it boosted the business environment, making it possible for banks to secure funds for onward lending to small-and-medium enterprises and the corporate sector.

The banking sector, which dominates the Rwandan financial industry, had a balance sheet of 21 per cent from Rwf1.25 trillion end 2012 to Rwf1.5 trillion end last year.

The National Bank of Rwanda attributed the growth to a 12.9 per cent increase in gross loans to the private sector from Rwf747b in 2012 to Rwf844b last year.