The ‘noise’ about lack of credit is from defaulters

The Private Sector Federation (PSF) recently released findings of their annual survey, revealing that access to finance remains the biggest challenge to businesses in Rwanda. This is even after commercial banks and Umurenge Saccos reported a huge increase in lending to the private sector. Edward Ojulu spoke to Sanjeev Anand, the managing director of I&M Bank (formerly BCR) and chairman of the Rwanda Bankers Association about the issue QUESTION: PSF’s recent report indicates that access to credit is the biggest constraint faced by businesses in Rwanda today, yet banks are reporting increases in their loan books each year. Is there something that banks are not doing right?ANSWER: Every project that deserves financing will always be funded. If you present a project that is not feasible, no bank will finance it. Commercial banks will always finance good projects with the capacity to repay loans and those presented by people with a good record of loan repayment. Commercial bank loans to the private sector increased by 35.6 per cent in 2012 to Rfw747.3b.The ‘noise’ (about lack of finance) is coming from either past loan defaulters or those whose projects don’t make sense. We now have a centralised data bank of loans under the Credit Reference Bureau, where those categorised as non-performing loans are listed. In the whole of Africa, it is only in Rwanda that commercial banks lend even to start-up businesses. Lending to start-ups is done by venture capital funds, but in Rwanda banks have gone as far as providing start-up capital. Audited books of accounts are there for all to see that we are lending money, unless someone wants to insinuate that all our audited books are not correct. Why don’t you help those with bad business plans to polish them since, as banks, you have the expertise?We (I&M Bank) do that under our corporate social responsibility. We still continue to provide training to small-and-medium enterprises (SMEs) on business and financial management. Those who have benefitted from our training programmes are doing very well. Some of those we trained were not our customers, but have since accessed loans because of the financial expertise they gained. Their businesses are doing well. As part of our corporate social responsibility, we shall soon resume the training programmes. You have rebranded from BCR to I&M Bank. Why kill a household name, a successful brand built over 50 years?It is true that BCR is a successful brand. However, the BCR brand belongs to the present and I&M represents the future. I&M Bank, that acquired a controlling stake in BCR last year, gives us a regional status and regional products. As a regional bank, we don’t need to have different names in different countries. For example, Citi Bank will always be Citi Bank everywhere.Apart from the regional brand, everything else remains the same, same good services, management and, hopefully, same managing director.