Category: Business

Working with a trusted business partner, making well-informed decisions and striking the balance to treat stakeholders and clients fairly are among key considerations driving efficiency, taking the business to greater heights and create path for the business to thrive and generate more profits.

In addition to existing conducive business environment and security, investors need not to worry as they have got another reason to stick to Rwanda’s openness for businesses.

With an average annual growth rate of 8.6% over the past 10 years, Rwanda is one of Africa’s fastest growing economies which is now poised to become one of the continent’s leading financial centres. It is ranked second in sub-Saharan Africa in the World Global Rule of Law Index and second for ease of doing business. Rwanda is also recognized as the least corrupt, safest and first in terms of network readiness on the continent.

Among others, Rwanda has established a strong Double Taxation Avoidance Agreement (DTAA) network with many countries and the country is extending its network in Africa and with leading developing economies. The country has also entered into Investment Protection Agreements with several countries such as USA, Germany, Belgium and South Korea.

With long-standing experience, JurisTax Group has again proved its prowess as a reliable partner to lean on as it continuously strives to take the lead in the provision of tax advisory and related services with the expansion of footprints to Rwanda and local offices that will set a benchmark for regional presence.

The recent coming to Rwanda also adds up to the country’s ambitions to become an investment hub where almost all services for investors are pooled together.

Established in 2018, JurisTax Rwanda Ltd is part of JurisTax Group which is based in Mauritius since inception in 2008. The group has presence in Dubai, Seychelles, China, South Africa and Rwanda.

The company’s presence in Rwanda makes it the first local Trust Company Service Provider regulated by the National Bank of Rwanda (BNR). It is also member of Kigali International Financial Center (KIFC) making it easier to provide a full range of support services to clients, including corporate set up, administrative, accounting and secretarial matters.

According to Mrs Murorunkwere N. Lydie, the group has expanded footprints to Rwanda and joined the KIFC to be able to support different financial services companies aspiring to bring their investments to Rwanda.

Apart from that, the local subsidiary also looks forward to building capacity in the Rwandese market, in collaboration with a training institute based in Kigali (Africa Institute of Training & Development Ltd – AITD) to deliver high-quality trainings to equip the Rwandese professionals with the most up-to-date skills and knowledge needed to efficiently handle the contemplated influx of business in the Rwandese market.

With 2000 clients globally, JurisTax Group manages today a portfolio of US$5billion with major customers coming from the United States of America (USA), Asia, Europe and the African continent.

The group’s subsidiary in Rwanda works with private institutions in different sectors.

As Mrs Murorunkwere explained, the portfolio is growing gradually as Rwanda, through the KFIC, continues to offer different tax incentives to attract investors from around the world.

“JurisTax Group wants to use Rwanda as a channel to lure different investors on the continent after Mauritius. We want to make Rwanda as a gateway for foreign investors from Europe and Asia among others to enter the African market,” she said.

After completing the first point of entrance for investors which begins with registration at Rwanda Development Board (RDB), JurisTax Rwanda Ltd provides support beyond registration be it licensing from different authorities like the Capital market Authority, the National Central Bank, and Ministry of Trade among others.

“We try to work with those investors to understand the nature of business environment because it can take some time when you are not familiar,” said Mrs Murorunkwere.

“JurisTax Rwanda Ltd is not only trying work with the entire ecosystem in terms of regulatory bodies, but also making sure that the company to set up on the local market is going to be compliant with taxation, different laws with due diligence. We need to be cautious, work diligently to ensure new investors come with good reasons and help them develop proactive approaches to de-risk businesses in many ways,” she added.

As Murorunkwere revealed, JurisTax Rwanda Ltd seeks to be the leading trusted corporate service provider on the Region.

The company also mulls penetrating into other neighbouring East African countries.

“We have started creating synergies with other companies in the region so that we can help investors interested to expand businesses in the area. We will grow our African presence step by step but the main transactions are currently based in Rwanda,” she said.

JurisTax Rwanda Ltd is not only helping companies but also individuals with diversified investments through guidance to tap into available opportunities on the local market and helping them to maximize benefits from offered incentives.

The Government of Rwanda targets to increase urbanization rate from 18% to 35% in 2024 to support economic growth.

While Kigali hosts about half of the urban population in Rwanda, a Housing Market Study for Kigali (2012-22) estimates that total housing needs (2012-22) reach 458,256 units, of which 344,068 are to be constructed.

The demand for affordable housing has not been thoroughly researched countrywide yet studies are in preparation where it is estimated to double the total need in Kigali.

This stresses the need to bridge the gap between housing demand and supply for people in low and middle-income segments and high end users.

It also challenges city planners, developers, and banks to seek new approaches to encourage investors to fund housing projects.

Despite existing constraints in housing finance, lending conditions have improved through the introduction of longer credit terms slightly reducing interest rates, a larger and more accessible variety in terms of down-payment options among others.

Ecobank is among other banks that have not been left behind tackling financial issues restraining people with a quest to invest in housing.

With various loan products to support people’s ambitions to grow their finances, the lender added mortgage loan to existing products to keep walking together with clients in their businesses.

Ecobank’s Mortgage Loan finances the borrower’s residential house purchase or renovation.

Every aspect of this loan has been designed to help clients realize their dreams to own homes.

IGIHE has caught up with Olivier Mpenzi, the Head of Personal & Direct Banking at Ecobank Rwanda Plc to speak more about the product promising to turn clients’ dreams into reality.

Excerpts:

In which context Ecobank introduced the mortgage loan?

When you buy a home or refinance your mortgages, it’s a big financial decision. By introducing the mortgage loan product, we wanted salaried and self-employed customers to own a house and this will help them to make large purchases.

What are key features?

Below are features of the mortgage loan facility:

1. Outright Property Purchase

This variant of the product provides financing for salary account holders to buy completed properties for residential purposes. It helps our customers achieve their dreams of becoming homeowners.

2. Equity Release

This is the opportunity for homeowners to have a portion of the value of their properties released to them as cash in other to meet other financial needs.

3. Renovation

This provides homeowners the opportunity to have access to substantial cash with which they can renovate and upgrade their homes to their required taste; thereby increase the value of the property and the collateral coverage on the loan.

4. Estate development

This provides opportunity for customers to acquire properties within Estate. The property may also be semi-finished or where payment may be made based on agreed milestone. This also include where individuals come together for the purpose of creating a private Estate.

What are the unique benefits the borrower receives with Ecobank mortgage loan?
Affordable interest rate, annual management fees has been waved, dedicated relationship manager and other added services like, digital tools for customers to be transacting at any time, our goal is to help our customers to stay closely connected from anywhere in the world.

Which documents required applying for Ecobank mortgage loan?

A mortgage loan is one of offered loan products. When applying for a mortgage, one has to be an existing client channeling his/her salary to Ecobank. Once your salary domiciliation letter is provided to us other administrative documents are very easy to get.

How much is the monthly payment?

There are many factors taken into consideration while determining mortgage loan payment but we cannot exceed 50% of monthly salary as the maximum repayment capacity.

It also aligns with the regulations the Central Bank’s regulations whereby total monthly payments and other consumer financing does not exceed 50% of the net disposable income.

Do you require an inspection to qualify for this mortgage loan?

A home is a big investment. The bank will require a valuation report before they decide to finance or to service that loan. Because it’s very important to know about the conditions of the house you’re about to purchase if is in good condition or not in order to mitigate the risk. A valuer will look at the structure of the house and confirm that there are no major issues with the house. Once we have a better picture of the house’s condition, we proceed with the next step.

Are there pre-payment penalties with this loan?

At Ecobank, we don’t charge any fees for early repayment. Our purpose is not to penalize our clients. As long as you have that capacity to pay loan before, you will liquidate it without penalties.

Besides, you can complete transactions using our online service (Ecobank Online) without necessity for physical presence at the bank’s offices. This is how Ecobank is taking the lead to digitize even more complex processes by tapping into the advantage of digital technology.

What is your message to existing and potential clients?

First of all, a decision to have or purchase your dream home is one of the most important decisions you can make in your lifetime. I will strongly recommend everyone who doesn’t have a house to think about it and Ecobank will help you to achieve your dream.

Moreover, I encourage them to take advantage of our best loan products for retails meeting their banking needs like Personal Loans, Car Loan, Residential Mortgage Loans, Renovation or Land Purchase and Equity Release.

Generally, the bank’s operating income was Rwf 14.9 billion which is an increase by 20% compared to last year’s performance.

The bank also registered Rwf5.2 billion profit before tax.

The performance was mainly attributed to increased Net Interest revenue, 19% higher than the same period last year and investment in treasury bonds.

The bank’s management has revealed that the financial performance in the first half of the year reflects the quality of deployed strategy which has broadened earnings and strategically positioned it to thrive through the current global health and economic crisis.

“We have posted a solid set of results and we are more pleased with the fact that we have helped retain over 1800 MSME jobs and 240 companies through the IFE [Investing for Employment] grant facility and we are ready to disburse the next tranche of 2.5m €,” said the CEO of I&M Bank Rwanda, Robin Bairstow.

Bonaventure Niyibizi, the Board Chairman of I&M Bank said that the lender posted impressive results despite undoubtedly tough and trying times and managed to remain relevant to its customers and the community by adjusting the way of doing business to meet market needs.

“Going forward, our focus is not just to survive this pandemic, but to thrive beyond it. That is why we are going ahead with our plans to reimagine how we create value for all our stakeholders. We remain focused on supporting the growth of the MSME sector and private in general which we believe is the backbone of the Rwandan economy,” he noted.

At the colorful bell ringing ceremony held at Kigali Marriot Hotel; the Minister of Infrastructure, Amb. Claver Gatete presided over the launch of the listing and trading of first tranche of Rwf6.5 billion Long-term Fixed Rate Corporate Bond amounting to Rwf3.5 billion.

The first tranche proceeds have been earmarked for refinancing the existing bank loan, investment into operational power plants and bond issuance related expenses.

Investors can expect good return since ENERGICOTEL has committed a 13.75 percent fixed interest rate on the Rwf3.5 billion tranche which received 100% subscription a fortnight ago.

As he delivered remarks, Minister Gatete reflected on the role of the Government of Rwanda in the development of the capital market where it uses the market for issuances.

“By issuing treasury bonds to the public and privatizing a few of its own companies through the market, the Government has shown a good example to the private sector to follow suit,” he said.

The Minister also commended ENERGICOTEL PLC for taking the bold decision to be a pioneer in the energy sector to use capital market in issuing its maiden corporate bond.

“This is a good signal that the market is slowly getting ready for the real private sector to tap into the opportunities the market has to offer. I call upon the investors and private sector firms to exploit the immeasurable opportunities available,” he noted.

Ferdy Turasenga, the Executive Director of ENERGICOTEL PLC said that moving to the capital markets is an essential step towards showcasing additional avenues for capital formation and providing a platform for investors to participate in ENERGICOTEL PLC investment plans.

“We are excited to continue on our growth trajectory within the renewable energy space, with our core business of power generation and engineering consultancy,” he stated.

The CEO of Rwanda Stock Exchange, Pierre Celestin Rwabukumba reemphasized the role of the capital market in the economy noting that the decision for ENERGICOTEL PLC to ‘use our young bourse is yet another vote of confidence in our market’s ability to mobilize resources especially during the current crisis the world economy is going through’.

“By listing ENERGICOTEL PLC, we are increasing our menu and diversification for investors in the market. The fact that the company is one of the leading IPPs in Rwanda is an added value since they are heavily involved in the renewable energy. Thus, it gives us a few additional points in saving the planet and complying with the UN’s SDGs and ESGs talking of sustainable and or green finance would not very far from happening in our market,” he affirmed.

The Ag. Executive Director Capital Markets Authority, Eric Bundugu noted that the successful subscription of the Rwf 3.5 billon in first tranche of ENERGICOTEL PLC Long-Term Bond Programme exhibits investors continued growing appetite for more and diverse products in ‘our capital markets industry’.

“It also provides a great opportunity for investors to be part of ENERGICOTEL’s continued success,” he said.

About ENERGICOTEL PLC

ENERGICOTEL “ECTL” PLC is an Independent Power Producer (IPP) and an Engineering Consulting Company with Power Purchase Agreements and Concessions to design, build, upgrade, finance, operate, and maintain power plants in Africa. Currently, ECTL operates 3 Hydro Power Plants namely: Keya, Nkora & Cyimbili in the Republic of Rwanda. ECTL HPPs owns a combined installed capacity of 3.2MW and it has supplied 17M kWh of electricity to the national grid of Rwanda in 2020.

About RSE

The Rwanda Stock Exchange Limited was incorporated on 7th October 2005 with the objective of carrying out stock market operations. The Stock Exchange was demutualized from the start as it was registered as a company limited by shares. The Company was officially launched on 31st January 2011.

Currently, the RSE has 10 listed companies 5 of which are domestic companies and five cross listed companies from Kenya and South Africa and standalone fixed income board.

“Aktif Bank of Turkey is opening a representative office in Kigali to cover East Africa, pending final authorization from the National Bank of Rwanda,” Burcu Cevik told Anadolu News Agency recently.

According to the ambassador, Turkey is exploring new opportunities for cooperation with Rwanda in the financial sector as the country strives to become a financial hub for Africa, with the Kigali International Financial Center (KIFC).

He added that the Council for External Economic Relations of Turkey (DEİK) and Rwanda Finance Ltd, the company that promotes KIFC, took an important step by hosting a webinar on June 2 to discuss various possibilities of cooperation.

“The favorable business environment, political stability, adherence to the rule of law and the existence of strong institutions have aroused Turkey’s interest in recent years,” said the ambassador.

Aktif Bank is an entity of Çalık Holding, founded in 1981 by Ahmet Çalık. The group is present in the fields of energy, construction, mining, textiles, finance, telecommunications and digital.

The seminar to create awareness of the business opportunities available in the two countries brought together over 200 participants. It was also attended by Ambassador of Rwanda to Zimbabwe James Musoni, Ambassador of Zimbabwe to Rwanda Charity Manyeruke together with high level officials from the Rwanda Development Board (RDB) and Zimbabwe Investment Development Agency (ZimTrade) among others.

Zimbabwe is a Southern Africa country covering a land area of 390,757 square kilometers. The population demographic survey conducted in 2012 shows that the country’s population was estimated at over 13.1 million of whom 94, 7% are reported to be literate.

Tourism is among main contributors to the country’s economic growth with 12% along with agriculture (11%) and mining (9%) while the service sector contributed 16%.

While addressing Rwanda- Zimbabwe Trade and Investment virtual conference, the CEO of RDB, Clare Akamanzi explained that both countries enjoy existing relations and cooperation in different areas that building relationships upon trade and investment is the current priority.

Akamanzi lured investors from Zimbabwe to tap into presented opportunities in different sectors including trade and agriculture among others.

“Energy, agriculture, trade, hospitality and hotels and financial sector are areas with top investment opportunities in the country,” she revealed.

Akamanzi emphasized that the country registered remarkable economic growth in 2019 by 9.4% before COVID-19 pandemic.

“Rwanda continues to position itself as a proof-of-concept country for innovations. This is why we were able to attract some of the investments we have in the country like an assembling plant for Volkswagen, Zipline which is doing delivery of blood using drone,” she said.

As he highlighted the relevance of promoting cooperation between both countries, the CEO of ZimTrade Allan Majuru said there has been an insignificant trade between Rwanda and Zimbabwe noting that the investment conference is set to unlock various opportunities of trade between the two countries.

In Rwanda, agriculture accounts for 24% of the economy while industries and services contribute 18% and 49% respectively.

The fact that Rwanda is a member of EAC exposes Zimbabwe to a wider East African market with over 117 million population not considering the Democratic Republic of Congo DRC which has also submitted application to join the regional bloc.

Majuru stressed that another meeting is planned in the near future where quite a big number of business people from Zimbabwe will come to Rwanda in a conference expected to increase trade and investment between both countries.

“ZimTrade will be taking 100 companies to Rwanda for this investment conference and we will stand guided by our hosts on the numbers with regards to the Covid-19 protocols. The delegation travelling will be led by Foreign Affairs Minister Shava. We believe the trade between Rwanda and Zimbabwe has been insignificant and this investment conference will play a huge part in unlocking investment opportunities between the two countries,” Majuru said.

“We are also trying not to look for trading opportunities but we are also looking at creating a platform where Rwanda uses Zimbabwe as a platform to extend its services to countries this side of the region. We might be called landlocked as Zimbabwe but we call ourselves land linked and the same applies to Rwanda,” he added.

The Rwanda-Zimbabwe Trade and Investment Conference is slated from July 28 to 30 in Kigali, Rwanda.

Speaking to participants, the CEO of RDB Claire Akamanzi said that Rwanda is ready to welcome the business delegation from Zimbabwe.

“We have been working together as two countries. We are ready to welcome the business delegation coming from Zimbabwe. We hope this conference is going to increase trade between the two countries as well as new investment opportunities,” she noted.

Akamanzi reiterated Rwanda’s commitment continue offering a conducive environment for investment on a market with high economic growth rate.

Investors also expressed willingness to tap into presented opportunities.

“This cooperation presents huge opportunities to both sides. We are ready to facilitate the shipment of cargo from Rwanda to Zimbabwe and vice versa,” said Michael Shyaka, the Managing Director of Pan African Logistics.

Benson Mbewe, the CEO of AB Communications which owns media houses including Business Times, ZiFM Stereo, 98.4 FM Midlands and Hevoi FM highlighted that such meetings are crucial to expand opportunities.

“This is going to be a wonderful experience for the business community and we are still finalizing conference packages at the moment,” he noted.

Rwanda and Zimbabwe are both members of the Common Market for Eastern and Southern Africa (COMESA) where both countries stand to benefit from reduced customs duties.

Zimbabwe is also a member of South African Development Community (SADC).

Rwanda has vast opportunities for Zimbabwean businesses wishing to do trade and to invest in its fast-growing economy while Zimbabwe is keen on growing its exports to Rwanda with market survey results by ZimTrade, indicating that locals could ride on this destination to generate more earnings.

In 2019, Zimbabwe generated US$3 million from exports while Rwanda earned US$152,000 from exports to the country.

Increasing trade with Rwanda is expected to enhance access to markets in the East African Community and in turn, increase Zimbabwe’s exports to the region with a combined GDP of more than US$177bn.