The report says that collected loans rose from Rwf307.6 million in 1999 to Rwf837.0 million in 2000 and Rwf1.8 b in 2001.

In 1995, when the economic activity was at the verge of recovery and just a year after the 1994 Genocide against the Tutsi, the banking sector was almost collapsing, says the National Bank of Rwanda.

Rwanda had only four banks including three commercial banks and one development bank, operating before 1994.

The commercial banks included Bank of Kigali (BK) Commercial Bank of Rwanda (BCR) and BACAR.

The development bank was, Development Bank of Rwanda (BRD). Since then, all these banks with the exception of BK have been acquired by international financial institutions.

From 1996 the central bank has been carrying out audits aimed at evaluating the loans portfolio and the financial position of those institutions.

"In general, results from the first reorganization plans have been satisfactory though it has been noted that some banks experienced specific difficulties attributed to poor quality of a substantial number of loans granted after the 1994 tragic events,” said the 1995-2007 BNR report on banking supervision.

The audit says that the 1994 war and genocide strongly weakened the banking activity in the country, leaving a substantial figure of Non Performing Loans (NPL) on the banks’ balance sheets.

Bank losses came in many ways as a result of the war. First many bank clients who had acquired loans were killed and a reasonable number of investments, financed through debt, were halted.

However, BNR says that the massive inflow of capital during the emergency period which followed, immediately tried to generate effervescence of the economy.

During the same stretch, the credit activity of financial institutions has been highly stimulated and outstanding credits moved up at a high speed.

The RPF leadership under his excellence Paul Kagame has attracted numerous investments which have helped in stimulating the local market.

This has led financial institutions to regain their business through financing real estate, hotels, buildings and residences for rental use.

As a result, the loan portfolio of banks grew considerably. The report says that collected loans rose from Rwf307.6 million in 1999 to Rwf837.0 million in 2000 and Rwf1.8 b in 2001.

The central bank says that this performance, though positive, was not sufficient since the collected amounts were less significant comparing to the total non-performing loans.

"Furthermore, even if some institutions have improved their performance, others did not experience the same success,” the audit says

In examining the case of the statement of irregular debtors, BNR notes that that several factors were the sources of non reimbursement of loans granted.

Some of the causes related to the few judicious investments on behalf of some borrowers, the bad use of borrowed funds, and incompetence of some entrepreneurs, the non -practicability or the non-productivity of some financed projects.

This poor performance was due to limited financial, human and material resources affected to collection teams and to the lack of experience of those ones.

Rwanda was robbed of its human capital in the 1994 genocide againstthe  Tutsi. The genocide claimed 1.2 million people, according to President Kagame who said on Monday that the figure was arrived at by government hired experts. 

The financial chaos which prevailed during the war as well as the inefficiency of courts enabled several solvent debtors of the banking system to escape the reimbursement of their debts.  

But these are also due to debatable behavior of some financial institutions themselves which did not request borrowers the proof of the reimbursement of their loans.

The monetary policy statement released by the central bank recently says that the NPL level reduced significantly from 13.8 percent at the end of December 2007 to 9.8 percent at the end of 2008, even if three banks had a NPL ratio in excess of 10 percent, the monetary policy statement

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