Bank of Kigali (BK), the largest financial institution by assets owned, says its loan book has grown in the last 9 months significantly supporting credit growth in the economy.

This means that the bank registered a modest increase by 21 percent in credit issued from Rwf77billion in December 2009 to Rwf92billion as of September30th 2010..

In an interview with Business Times, Lawson Naibo, the Chief of Operations (COO) at BK said that credit issued was largely attributed to construction, mortgages and trade.
"Generally looking at the whole banking sector the uptake of loans and investment has been a bit low as a result of last year slowing down of the economy,” he said.

According to the central bank, domestic credit of the banking sector expanded by 9.4 percent  in the 9 months of 2010 driven by the credit to the private sector which increased by 5.8 percent, far below the target of 20percent programmed for the whole year 2010.

"This year a lot of companies were reporting a slowdown in their revenue especially in the first half of this year. But in the third quarter many of the people who had had problems are now coming and asking for restructuring and also repaying,” Naibo said.

Naibo said that the bank is targeting to increase its loan book next year, specifically issuing long term credit which is still a key challenge for the industry.

The bank is currently negotiating long term credit facilities with the European investment bank, in addition to mobilizing two lines of credit worth over $30 million from multinational agencies.

The COO also mentioned that the bank is optimistic with that 2010’s profits will surpass the Rwf5.2 billion made last year due to sustained performance and growth in loans and deposits.

The bank registered a profit after tax of Rwf4.1 billion for the nine months accounting for 53 percent of the total profits of the overall banking sector while deposits grew by 15 percent from Rwf125 billion in December last year to Rwf143 billion during the period under review.

Naibo said the bank is repositioning by shifting focus from targeting the corporate to capitalizing on the retail sector and Small Medium Enterprises (SMEs) market segments respectively. "But we have now entered the market in a big way; we understand that the growth area is in retail and want to ensure that we grow our customer base,” he said.

As part of the growth strategy, next year the bank intends to increase its branches from the current 31 spread out throughout the country and focus on  product innovation.

"We have got a significant number of unbanked in Rwanda but also under banked, you find that even customers who have got the bank accounts do not get the right service; if you look at people with bank accounts; very few have got savings accounts,” the COO observed.

The bank will also focus on improving technology based delivery channels including telephone, internet banking to improve customer service.

The African Business Magazine recently listed BK among Africa’s top 100 banks.

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