Business round-up

SSFR sinks Rwf20b in real estates The Social Security Fund of Rwanda (SSFR) has invested a tune of Rwf20 billion in real estate projects as of May 31 2009, the pension body said in a report dated July 2009. The latest report on SSFR’s contribution to the economy indicates that already established real estate projects are worth Rwf6.9 billion while ongoing projects are valued at Rwf13 billion. “These are some of the projects undertaken by the SSFR without involvement of other investors,” the report from the Department of Planning, Research and Statistics reads in part. According SSFR, some of the ongoing real estate projects include; the Insurance Plaza whose investment is valued at Rwf5.2 billion while the Gacuriro phase 2 project where 234 housing units are planned has so far consumed Rwf500 million. AGF insufficiently utilised The Automobile Guarantee Fund (AGF), a fund that was established by government to compensate people injured or those properties destroyed by unidentified or uninsured automobiles is inadequately used. The fund’s General Director Bernardin Ndashimye said that only Rwf250 million has been compensated in 5 years, yet the fund mobilises about Rwf300 million from insurance premiums every year. “This means that a lot of victims are not compensated yet there is a fund to save their lives and properties. It is possible that there are many people out there who don’t know we exist,” Ndashimye explained. The fund created in 2002 has since raised Rwf750 million from 10 percent of premiums paid as ‘motor third party’ to insurance companies and returns from investments. RDB refutes MacGroup’s claims over dropping bid The steering committee of Rwanda Development Board (RDB) responsible for the sale of two state-owned tea factories, refuted claims that Mac Group Ltd pulled out in the bidding process because of inadequate information. Mac Group, which has businesses in East Africa and Indian Ocean, was among 13 companies that had expressed interest in investing in Rwanda’s tea sector. According to media reports, the Tanzania-based consortium said it pulled out of the bidding process because the information provided by Rwandan authorities about the two factories was inadequate to enable it make a decision on the acquisition. Joseph Akilimali, Director of Public Asset Transfer (former privatization secretariat) in RDB, said their data room has detailed information about the factories and the whole tea sector. “Mac Group did not attend the bidders’ conference nor did they come for the site tour, which implies they were not interested.” Meanwhile, evaluation is still ongoing to identify the best bidder. BRD net profits up by 89.2 percent The Development Bank of Rwanda (BRD) has registered Rwf1.4 billion in net profit during the first half of 2009 up from Rwf752m registered in the whole year of 2008, despite the current global economic downturn. The bank’s audited financial statements also showed that net interest income increased by 55.4 percent from Rwf916m last year to Rwf1. 4 billion this year. Jack Kayonga, the acting Managing Director of BRD attributed the 89.2 percent gain in net profit to robust appraisal services that have led to efficiency in service delivery. The bank’s profitability has also been attributed to loan recoveries. Non-performing loans, which reflect loans in default, reduced by 21 percent from Rwf2.3 billion last year to Rwf1836 million in six months this year. BCR resumes mortgage financing The Commercial Bank of Rwanda (BCR) has resumed mortgage financing selectively depending on the mortgage value after holding the product for about six months, the Managing Director revealed. “Doing it selectively doesn’t mean that we are facing liquidity problems. We just don’t want to get exposed by financing one product at the expense of the other,” Sanjeev Anand revealed. “Some applications have been approved for financing and we are still the leaders in this programme,” he said. The bank had suspended the product claiming it exceeded its ceiling of Rwf2 billion by 50 percent. This was a blow to many Rwandans who dreamt of owning houses. It also sent panic among real estate dealers since most of their sales are through mortgages. New Artel, SEACOM deal close A deal between New Artel and SEACOM allowing the government owned Internet Service Provider (ISP) obtain access to fibre optic cables is close. Francis Karemera, the Chief Executive Officer (CEO) said that with the proposal presented, the signing of a Memorandum of Understanding (MoU) is expected tomorrow (Monday). He said that the MoU will be valid for a year but with a possibility of extension depending they (SEACOM) honour their obligations stipulated in the contract. The SEACOM cables, stretching from the East African coast to different interior destinations of Kenya, Uganda and Tanzania, allows users to enjoy high-speed Internet, digital television, video conferencing, tele-medicine, digital villages and many other benefits. The availability of SEACOM bandwidth is also expected to lower Internet browsing prices 10 times less than the current cost. Once the agreement is reached, New Artel will be the third local ISP to obtain a right of accessing the SEACOM fibre optic cables after Rwandatel and Altech Stream Rwanda. IFC, PSF partner to develop SMEs The International Finance Corporation (IFC) has partnered with the Rwanda Private Sector Federation (PSF) to build capacity aimed at developing of Small and Medium Enterprises (SMEs). The partnership has seen 80 small and medium entrepreneurs trained on capacity building. The partnership seeks to improve on the quality of the products that the businesses exports in order to become more competitive on the international markets. Ends