Former shareholders of Banque Populaire du Rwanda (BPR), do not have information about their shares, and have not yet received dividends for years, and Members of Parliament are calling for action to address the issue.

The issue was discussed by the Parliamentary Committee on Economy and Trade with the Minister of Finance and Economic Planning as well as some officials from the bank, on Wednesday, June 1, 2022.

Since its creation in 1975, as Union des Banques Populaires du Rwanda (UBPR), it was like a savings and credit cooperative comprising some 148 "people’s banks” until 2007 when it became a commercial bank.

The issue was first highlighted by some of the members to MPs during their countrywide tours made from March 12-30, 2022 which were meant to assess citizens’ living conditions and the implementation of development projects.

So far, the bank has been sold three times to various firms, namely RaboBank, Atlas Mara and most recently, KCB Bank.

Also, the bank’s members expressed concern that they are not consulted on related critical decisions, and that they do not know the state of their shares after the lender was sold.

One of the members who spoke to The New Times on condition of anonymity said that there has been lack of information such that people do not know what is going on in a bank that is supposed to be theirs, claiming that its sale was done without consultation.

"As members of the bank, we do not know the value of our shares, nor the profit we might have in it. And, the sale of the bank has not brought any profit to its members who own shares in it,” he said.

However, Théogène Rutayisire, stakeholders' affairs manager at BPR Bank Rwanda told the lawmakers that, regarding decision making, local stakeholders are represented – by one person on the bank’s board of directors, and by 54 people (from across the country) in its general assembly.

MP Barthelemy Kalinijabo said that it is difficult to know the trend in the value of a share in the bank because no information is available to members about it, wanting to know the initial value and the current one.

"We would like to know when the bank member will have the right to make a decision on their shares because that is the response the people need,” Kalinijabo said.

Options on table

Responding to the concerns, Uzziel Ndagijimana, the Minister of Finance and Economic Planning told lawmakers that there are options that are being considered including continued efforts in looking for the yet unidentified members.

"But, for already identified members, there might be some who may wish to sell their shares to investors because they are not getting profit from them, and that for those who want to remain shareholders in the bank they can choose to,” he observed.

However, it is not yet decided when those who might want to sell their shares will have the option to do so. But, the Minister said that this is an urgent matter that has to be decided as soon as possible.

Data challenges

Ndagijimana said that there was a challenge in access to data due to factors including the 1994 genocide against the Tutsi which resulted in a loss of some assets and data in banks across the country.

However, he said that efforts were made to find the data such that by the end of July 2007, preliminary information indicated that there were some 290,000 BPR members. But, he said that these had incomplete identification, with names and account numbers only.  

In 2009, he said, an exercise was launched to know the full identification of the members. Up to know, he indicated, there are over 163,000 members with complete details.

Though all the members have not yet been identified, their money (shares) is available, the Minister said.

Concerning dividends, Ndagijimana said that though the total assets owned by all the members seem a considerable amount, the individual portion is very small such that the dividend might be insignificant.

About the bank sale

In 2013, Minister Ndajimana said, the regulation by the National Bank of Rwanda (Central Bank) on the licensing conditions of banks, raised the initial capital of banks.

That time, he said, BPR was requested to have Rwf30 billion as the initial capital, yet it had Rwf15 billion only.

To remain in the financial sector business, he said, it required that its members increase their shares in order to meet the Central Bank regulation requirements.

Realising that BPR could not raise the required funds, the Minister explained, Atlas Mara ventured in the bank by buying 62 per cent of its shares, RaboBank got 14 percent, while local members got 23 per cent.

Last year, Atlas Mara, as the majority shareholder in BPR, sold its shares to the Kenya Commercial Bank (KCB), but the Rwandan members retained their shares.

Now, he indicated, KCB owns 87.56 per cent of the shares, while local shareholders account for 12.44 per cent.

In terms of money, he said, KCB has Rwf71.3 billion, while local investors have Rwf10.1 billion, making the total assets of the bank amount to over Rwf81 billion.

However, the local shareholders argued that they have not benefited from the bank’s reported growth.