Banks: Rwanda loses 64 billions a year on queues!

Customer care is under the spotlight since Presindent Paul Kagame’s comment on January 23, 2009, that “we can no longer accept a culture of mediocrity” from Rwandan institutions giving poor quality services. In a recent report by the Institute of Policy Analysis and Research-Rwanda (IPAR), Gloria Lwakabamba and Paul Skidmore estimated that improved customer service could increase our GDP as much as $40 million a year by 2012. Such estimation was seen by some to be overly stated, but a close look to what is happening in our business sector is rather pointing to alarming forecasts if nothing is done to tackle this problem. Let’s take only one example: the banking system. This example is taken only as an illustration, as I did not carry out a deep investigation to get accurate data about the whole sector across the year. It intends to make you think twice: I am a client of X bank (I cannot disclose its name here, for fear of being taxed with defamation, but this is a true story). After the last weekend show on financial crisis in which Finance Minister James Musoni and the Governor of the National Bank, Francois Kanimba urged Rwandans to acquire the culture of “saving”, I made an “Umuhigo” (performance self commitment) of improving my saving discipline, and make small deposits in my bank account twice a week. Yesterday, in order to abide by my saving routine, I went to the bank, and got a voucher (with an orderly waiting number on it), at exactly 3:12 PM. There was a very long queue, and there was no vacant waiting seat. One hour later, I was still standing there, because I knew that if I took the money home, I’d surely be told that “amakara yashize…” (there’s no more cooking charcoal left) and the usual tra la la you probably are familiar with in our households, “we” poor dwellers of this Kigali, and probably end up spending it. It was exactly 7:16 PM when I was received by a young teller, and managed to deposit the money. On my way home, rather angry and frustrated, I was still wondering if I’ll keep my saving discipline any more. From the bank office down towards Kwa Rubangura bus stop, I mentally made the following calculations: It took me four hours to make a deposit. Last week I had spent two hours in my bank branch which is open during the weekends, doing the same. So, on average, I spend three hours to make a transaction. I am an ordinary man, and earn only five thousand a day. Let’s assume that it is an average salary level in Rwanda (because I assume that I am also an “average worker”). We are now 9.3 million Rwandans. 16 percent among us have a saving account of any type. That makes 1,488,000 bank accounts country wide. Now, let’s assume every bank operates like my bank X (three hours, on average, for a transaction). And suppose everyone makes two transactions a week. The total hours lost in bank transactions are therefore estimated at 464,256,000 hours per year, equivalent to 53,733 a year per person (or 53,733 people busy exclusively carrying out bank transactions during one year). With an average salary of RWF 100,000 per month, this amounts to RWF 64,480,000,000; or 3 percent of GDP (2007), for the banking sector alone. Benchmarking is very useful sometimes: a three-hour transaction (even taken as an extreme case) is worst by any standards. BNR did not include such an indicator in its reporting requirements, but it is high time it started monitoring efficiency as well, as the financial market is getting more and more competitive, with regional integration. In addition, improved efficiency would contribute to improving our “saving culture”, as there is no point holding a bank account if it takes ages to access it, and if the mattress can offer better services (if we don’t take into account safety issues). Straton Habyalimana, Gatsata, Gasabostratonh@yahoo.fr