Bankers have agreed to examine the possibility of increasing financing of mining projects in the country.

This was one of the issues agreed at a meeting of members of the Rwanda Miners Association (RMA), Rwanda Bankers Association (RBA), and government officials yesterday, in Kigali.

Lack of capacity to write proper assessment reports and business plans among miners and inadequate understanding of the sector by banks have previously been blamed for the meager lending which goes to the sector.

In its 2014 monetary policy and financial stability statement, the National Bank of Rwanda (BNR) indicated that 68 per cent of the loans that were applied for in the mining sector were rejected by banks, the highest rejection rate compared to agriculture and mortgage sectors.

The miners complained that banks often do not understand the mining business which often results in them delaying to give them credit or rejecting their applications.

But speaking at the meeting, Sanjeev Anand, chairman of RBA, said this could change.

He said, previously, there was lack of information about the mining sector.

This was coupled with certain policies relating to anti-money laundering, ‘know your customer’ and compliance which were introduced by the Organisation for Economic Development and Corporation markets of Europe and America, which meant minerals business came under more scrutiny.

"This is a large activity for us to ignore. At I&M Bank, we have been monitoring the mineral segment for the last four years and we have seen a lot of changes particularly on the regulations, the quality of supervision they now undergo and the kind of documentation which can be presented to banks,” Anand, who is the managing director of I&M Bank, said.

Anand said more miners were today transacting business through banks and accessing credit.

Participants commended the progress made in the sector Francois Kanimba, the Minister for Trade and Industry pointed out that it was easy for miners to access working capital not necessarily through banks but through also buyers of their minerals.

He said the main challenge miners faced is in accessing finance for extracting minerals.

This, he said, could be solved by both the miners and the banks developing reports pertaining details of the proposed investment in the different mining sites and using their mining licences as collateral for credit.

"RBA, RMA and the Rwanda Natural Resource Authority need to sit down and discuss the details needed for mining extraction. The banks would be very comfortable (with such information) to lend,” he added.

Jean Malic Kalima, chairman of RMA and managing director of Wolfram Mining and Processing Limited, commended the idea fronted by the trade minister and suggested a professional body be formed to help the miners, most of whom are incapacitated and organised in cooperatives, write assessment reports and business plans.

Mineral exports are among Rwanda’s top foreign exchange earners.

Last year, total mineral export earnings dropped by almost 10 per cent to $203.32 million (about Rwf145.4 billion), from $225.7 million (about Rwf161.4 billion) in 2013, mainly due to a drop in international prices.

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