One of the largest banks in Rwanda has received a whooping boost of Rwf 7.4 bn from the African Development Bank (AFDB ).
Bank of Kigali (BK) has signed a US$ 12m (Est. Rwf 7.14bn) line of credit and a US$ 500, 000 (Est. 297,500,000) grant agreement for technical assistance from the fund for African Private Sector.
According to BK’s Managing Director, James Gatera the credit will improve the bank’s liquidity and its ability to support key economic sectors, such as infrastructure, manufacturing, agri-business and tourism.
“I am pleased that BK is once again able to secure wholesale funding at competitive rates, this credit line will enhance the bank’s ability to increase provision of financial services in the country,” Gatera said.
The technical assistance grant will strengthen the capacity of the Bank of Kigali as it pursues its strategy to bank the unbanked population and increase financial services in Rwanda.
It will improve the Bank’s capacity, including designing and implementing environmental policy and aligning it to Rwanda’s commitment to environmental conservation for sustainable economic development.
The AfDB’s financing and support to the Bank of Kigali is in line with the Rwandan government’s strategy to deepen the availability of banking services by supporting local Rwandan banks and microfinance institutions in their efforts to expand banking services to rural Rwandans.
The Bank of Kigali has become one of the largest banks in Rwanda, now said to be well positioned to channel funding to micro- small- and medium-enterprises and infrastructure projects.
The AfDB estimates that 2,075 jobs will be generated in the sub-projects financed with resources from the line of credit.
Approximately 60 percent of jobs created will be for skilled workers and the beneficiary companies will likely increase their incomes by about 10 percent over the same period.
Negatu Makonnen the AFDB Country Director noted that the credit line will boost the economic growth by not only generating employments but also business opportunities, especially for micro-small and medium enterprises.
“The AfDB’s credit facility intervention will help Rwanda’s financial system by making long-term financing available to the Bank of Kigali and its clients, especially local small and medium enterprises” said Negatu Makonnen, AfDB’s resident representative in Kigali.
“By supporting the growth of local companies, the line of credit will indirectly facilitate job creation and economic empowerment of the beneficiaries, including women and youth, through increased revenues, increased income, and increased capital,” he added.
The AfDB’s public sector lending operations in Rwanda currently amount to USD 966 million, comprising multi-sector investments in agriculture, transport, human development, public utilities, finance, and industry, mining and environment.
The AfDB has also approved five on-going multinational projects amounting to USD 179 million. From its private sector window, the AfDB is funding eight projects amounting to USD 87 million.
This includes financial and technical assistance to the private sector through the Banque Rwandaise de Développement (BRD) and the Bank of Kigali, and direct financing of productive investment projects such as CIMERWA for cement production, and Kivuwatt Power for clean energy.
The African Development Bank Group’s mission is to help reduce poverty, improve living conditions for Africans and mobilise resources for the continent’s economic and social development.
With this objective in mind, the institution is assisting African countries – individually and collectively in their efforts to achieve sustainable economic development and social progress.
In 2011, the Bank of Kigali became the second domestic company to be listed on the Rwanda Stock Exchange.
It has a credit rating of A+/A1 by Global Credit Rating Agency from South Africa. In 2009 and 2010, the Bank of Kigali was recognized as the Best Bank in Rwanda by emeafinance, in addition to Bank of the Year by the Financial Times.
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