Kagame calls for innovation in the banking sector

NYARUGENGE - At the time when the whole world is rattling the economic recession, President Paul Kagame, has challenged Rwanda’s banking institutions to be more innovative and turn the banking sector’s challenges into opportunities. The President made the challenge while officially inaugurating Kenya Commercial Bank (KCB) Rwanda ltd operations in Rwanda, yesterday, at the bank’s head office. KCB Rwanda ltd is a subsidiary of Kenya’s KCB group. “The current global financial crisis not withstanding, Rwanda’s banking and financial sector is healthy and growing. But the sector needs to become more innovative to turn Rwanda’s challenges into opportunities,” he said. Kagame’s call comes at a time the banking industry in Rwanda is saddled with liquidity challenges which have slowed private sector access to credit. “We know for example that the savings culture and rates in our country remain very low. But we are also aware that whenever Rwandans are challenged to raise financial resources they do so with remarkable commitment and result,” he said emphasising the need for dynamic institutions to mobilise greater resources. Which he said the country could; “creatively invest them into projects with more significant impact and reward,”“I am confident that KCB brings new ideas and attitudes and that together with its corporate counterparts in our banking sector, increased capabilities in these areas will be soon realized.” The President’s remarks come barely a day after the KCB group’s shares started trading on the Rwanda stock exchange, making it the only company to be quoted on the country’s bourse. “We should give this factor its due importance. This is a vote of confidence in the East African community and its member sates in the sense that we are a viable market individually and collectively,” stressed the President. Meanwhile addressing journalists earlier in the day, KCB group chairman Peter Muthoka assured Rwandans who will acquire shares in the bank that it will be value for their money because the bank’s liquidity will not be affected by the global financial crisis. He said the bank’s venturing into Rwanda is aimed at fulfilling its regional expansion plans. The 100 year old bank operates in four East African countries, except Burundi. The bank also operates in Southern Sudan. “As KCB, we think that there is time for everything and this is the right time to come to Rwanda,” said Muthoka. “We are a very solid bank with a huge balance sheet and I am sure this is what everybody wants to hear” Muthoka retaliated when asked what assurance he can give Rwandans at this time. Muthoka who was flanked by the KCB CEO, Martin Oduor-Otieno, and the entire KCB Board had met President Paul Kagame to affirm the bank’s commitment to support development and investment initiatives in Rwanda. Muthoka said that seven months after the bank launched its operations in Rwanda, considerable progress has been registered and the market penetration is growing at a fast rate. He noted that the bank is planning to expand its current branch network across all corners of the country. “We want to support Small and Medium Enterprises (SME’s), avail credit to people and create as many jobs as possible,” said Muthoka “The government is really supportive of our expansion plans, we have been welcomed well. The governor of the Central Bank has been supportive, the Finance Minister and even the President himself have really helped us and we will not disappoint.” Muthoka told the Press. Banks are catalysts to economic development and we think that if banks come up to support investments, float shares, give loans, many people will know the value of banks. At the moment not even 20 percent Rwandans keep their money in the banks and there is need to improve” observed Francis Gatare, the Chief Economist in the Presidents Office. Ends

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Kagame calls for innovation in the banking sector