- Rwanda’s financial sector has made great strides towards becoming modern. The sector is stable, well capitalized, profitable and liquid. The sector consists of a wide and growing array of institutions, Banks, microfinance institutions, savings and credit cooperatives (SACCOs), insurance companies, and pension funds and is becoming increasingly diversified.
In terms of assets/GDP, the banking sector continues to dominate the financial system with 65.5% followed by the pension, insurance and microfinance with 18.1%, 9.8%, and 6.6 respectively.
Rwanda’s priorities are to increase long-term savings and credit to the private sector to 30% of GDP. This will be achieved by enhancing savings mobilization, especially long-term savings and mobilization long-term capital for investment.
The government has started to regularly issue bonds in order to deepen the capital market and lengthen the yield curve, with the longest maturity today being fifteen years.
INTERNATIONAL BANK REPRESENTATIVE OFFICE
International banks can adopt a low risk familiarisation route into the Rwandan market by establishing a representative office in Rwanda.
- An International/Global bank represented in Rwanda will be in a position to support large projects initiated by both government and private sectors. This will include financing through syndication or directly and also transaction advisory services.
- The Rwandan economy presents various opportunities for the bank representative office to introduce to the wider bank group. These opportunities range from Trade Finance, investment management, corporate structuring, corporate finance, Treasury and Pension Fund Management and asset finance, to mention but a few.
- The recent Africa 2018 Wealth report highlights that Rwanda will be one of the strongest performing wealth markets over the next 10 years.
Increased credit in the agriculture sector is key to ensuring the development of the sector in Rwanda.
Several innovations/products (weather-based crop insurance, warehouse receipt schemes, etc.) can be introduced to improve value chains within the agriculture sector.
Small and Medium Enterprises are the lead drivers of job creation and economic development in Rwanda. If the business environment for these firms can be improved, they can become more profitable, increase in size, and tap into regional and global markets.
Financial institutions experienced in SME financing such as private equity and venture capital funds will help to increase access to finance for this category of enterprises.
REAL ESTATE INVESTMENT TRUST
Commercial REITs present a huge opportunity for the Rwandan Market especially financing and supply options for affordable housing, shopping malls, hotels and offices.