World Bank to recapitalise local banks

In a bid to respond to the current financial crisis, commitment to lending is to increase from $35 billion to $100 billion Rwanda’s commercial banks are to benefit from a World Bank fund to recapitalise financial institutions in developing countries. The move is aimed at mitigating the effects of the global financial crisis. The move will also help local banks increase their capacity to lend and finance long term projects which will in return contribute to the development of the country. This was mentioned by the World Bank’s Senior Vice President for External affairs, Communication and UN Affairs Marwan Muasher on Monday, during a briefing at the Ministry of Finance and Economic Planning (MINICOFIN). In his three-day official visit, Muasher will meet stakeholders in the financial sector, visit World Bank projects across the country meet people in the private sector, civil society academia and various government officials. In a brief meeting he held with the Finance Minister James Musoni, The World Bank official appreciated Rwanda’s progress and how funds are being managed. Muasher briefed the press that global economy will shrink to about 1.7 percent and in African growth is expected at 2.4 percent this year which is half of the growth rate last year. In a bid to respond to the current financial crisis, World Bank will increase its commitment to lending from $14 billion, $35 billion and up to $100 billion. International Financial Corporation (IFC) is also putting in place a global equity fund to recapitalize liquid banks and a global trade finance program. According to Musoni, discussions are going on with IFC to benefit from the initiatives. Musoni appreciated the World Bank Group’s support to the country’s economic growth. He said that the government is happy with World Bank because it’s been active in the country’s policy of poverty reduction and the 2nd phase of Economic Development and Poverty Reduction Strategy. “The World Bank’s success story is the direct budget support and it’s so impressive that about 41 percent of what we are supposed to get is already disbursed,” Musoni hailed. Rwanda has benefited from World Bank support in sector’s including agriculture, education and energy. The World Bank’s International Development Association (IDA15) facility which amounts to $42 billion funds the poorest people of developing countries. Ends

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World Bank to recapitalise local banks