FINANCE: Kigali set for South African credit institution

According to the NBR statistics, commercial bank consolidated assets as of June 30, 2008 stood at Rwf492b compared to Rwf467.5b in December 2007, representing an increase of 5.2 percent Compuscan Information Technologies, a South African credit institution has accepted to work in Rwanda. The country is to set up the first ever Credit Reference Bureau (CRB), according to the central bank boss. The CRB will be responsible for providing accurate information on borrowers’ debt profiles and repayment history, an activity that is currently done by lending institutions. The recorded information will be used by Commercial Banks, Credit Institutions and Micro Finance Institutions to quickly decide on ones’ loan request. François Kanimba, Governor National Bank of Rwanda (NBR) told the New Times yesterday that Compuscan has held negotiations with all stakeholders and a partnership agreement is expected to be signed before the end of the year. He said that the company has requested for a fund of $500,000 (Rwf277.8m) in order to start operations and that USAD has accepted to provide the finances. This comes at a time Rwanda’s banking sector is booming with high but reducing non performing loans. According to the NBR statistics, commercial bank consolidated assets as of June 30, 2008 stood at Rwf492b compared to Rwf467.5b in December 2007, representing an increase of 5.2 percent. Commercial bank total credit to the public in the first half of 2008 increased by 14.8 percent from Rwf279.9 b to 321.2 b while, total deposits increased by 3.9 percent from Rwf363.2 b to Rwf377.3 billions. The CRB is expected to reduce lending institutions’ losses through non performing loans mainly in the banking and microfinance sectors. Figures by the NBR indicate that commercial banks’ non performing loan size reduced substantially from 14.3 percent of the loan size in December 2007 to 8.8 percent in June 2008 and that the solvency of the whole banking sector system has strengthened from 15.1 percent to 16.6 percent. The CRB could contribute to the revamping of the recovering Micro finance institutions which have in the recent past registered immense losses. According to NBR, activity in the microfinance sector has been consolidating during the first half of 2008, with a 17 percent increase in total assets, 23 percent increase in total deposits, 13 percent increase in total outstanding volume of credit. However the non performing loans portfolio is still huge at Rwf2.2m from Rwf2.3m, representing a 3 percent decrease. Compuscan has presence in Uganda were in addition to the credit bureau, the company is responsible for delivering a biometric ID numbering system within the financial sector. Ends

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FINANCE: Kigali set for South African credit institution