Rwanda should develop its insurance indudtry if the economic is to grow and development fast, East African Development Bank director general said.

Godfrey Tumusiime said a developed insurance increases the stock-debt. He also described a developed insurance as the most efficient method of saving for business entrepreneurs.

He added that insurance enhances credit worthiness of commercial banks and helps in the development of capital markets.

 "The insurance industry plays a very important role in rebuilding financial institutions especially in an economy that has had a bad economic history and wants to grow so fast like Rwanda,” Tumusiime said. He was speaking during the launching Alliance Insurance Brokers (AIB), the first insurance brokers in the country at Kigali-Serena Hotel.

Tumusiime cited the Kenyan example in the 1990 when the donor countries stopped their financial aid to the country.

He said the Kenyan economy did not collapse partly due to a sound insurance industry during that time.

He however said the insurance industry in East African countries is still at a very young stage with very few players.

"It’s only 4 per cent of the population (EA) who carry out insurance services, while less than 1 per cent of Rwandan population carries out insurance services,” Tumusiime explained.

He said that the saving culture in the EA countries is only 2 per cent and this can be increased if a number of people joined the insurance industry.

Tusmusime advised that there is need for increased supervision and monitoring of the insurance industry in the country to strengthen their muscles for economic development.

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