Rwanda: Bank of Kigali Eyes Telecom, Insurance Sectors

The country’s vibrant and growing telecom sector has attracted interest from the banking industry, with Bank of Kigali (BK) planning to start offering telecom and insurance services. The move, according to the firm’s chief executive officer, James Gatera, is aimed at creating a one-stop centre for innovative business solutions.

The bank is only awaiting the regulator’s, (National Bank of Rwanda – BNR) approval to provide data services (telecom) and set up an insurance business, Gatera said at the bank’s annual clients’ day at the Kigali Serena Hotel over the weekend.

“We are calling this a ‘universal banking model’ where we seek to provide all major services to customers,” said the bank’s chief of operations, Lawson Naibo.

It is under this universal model that the Bank will start BK Insurance and BK Telecom.

The firm’s subsidiary, BK Securities already offers brokerage and other capital market ļ¬nancial services. Bank of Kigali is listed on Rwanda Stock Exchange.

“Everything we are doing is in line with our vision to be the leading provider of the most innovative financial solutions in the region,” said Gatera, adding that the new ventures will be managed independently.

There are 12 licensed insurance companies in Rwanda, but penetration levels still remain low. Therefore, entry (subject to BNR approval) of BK Insurance is going to breathe life into the sector.

Loan applicants are required by banks to present insured collateral, which is ordinarily provided by a third party (different insurance firm). By starting its own insurance firm, BK clients will be able to access loans and insurance services under one roof, effectively eliminating traditional cover providers.

“That way, we shall be a one-stop service centre for clients, providing both financial and non-financial services,” Gatera told the hundreds of customers at the event.

Clients will still have the option of using an insurer of their choice, but analysts say that it is easier and better to get both services from one firm to avoid delays.

The bank is already in partnerships with MTN, Tigo and Airtel, enabling BK customers with mobile money wallets to access their bank accounts on their mobile phones, and even apply for micro-loans.

John Rwangombwa, the BNR governor, who was the guest of honour at Friday’s event, praised the lender for its innovative products and electronic banking services, saying they support the country’s move toward becoming a cashless economy.

The recent acquisition of Banque Populaire du Rwanda (BPR) by Atlas Mara, a sub-Saharan financial services group, is expected to increase the competition in the banking sector. Atlas Mara had earlier in 2014 bought BRD Commercial Bank, which will now be merged with BPR to form one bank.

However, with a 33 per cent market share, Bank of Kigali is the leading bank in terms of total assets (as of September 2015). The local banking sector has over 10 players.