Rwanda : Another Kenyan Bank to enter Rwandan market
Another Kenyan Bank, Commercial Bank of Africa (CBA) is now considering extending its services to Rwanda next year, as a way of exploring the current booming Rwanda’s banking industry – which is considered to be one of the most vibrant and seen as a reflection of the ongoing transformation agenda being pursued by Government and other key stakeholders.
Competition in the sector has of late heightened that has drastically eroded margins as new entrants continue taking positions meant to deepen service provision in line with a fully liberalized regime.
CBA which is ranked eighth in terms of asset base within Kenya’s banking industry , has set its eyes on Rwanda after similar announcements by Diamond Trust and the formal entry of I&M Bank last month through buying out leading private equity firm Actis in Rwanda Commercial Bank(BCR). Analysts consider the top crust of Kenyan banks to be among East Africa’s strongest financial institutions and that their expansion programme based strategically on fanning out across the region is seen as a show of their might as regional integration takes root.
The aspirations of CBA will find other Kenyan banks -Fina Bank, KCB, Equity and lately I&M – that are currently enjoying their presence in Rwanda’s booming economy in the east and central African region. CBA’s regional expansion strategy is mainly driven by establishing a presence in Uganda slated for this year after its successful entry into Tanzania.
The bank has set apart over Rwf 12.3 billion for this expansion move while it is currently restructuring its top management in order to help manage the process, according to Kenyan news sources.
“We are expanding to Uganda by end of this year upon license approval. Following these expansion plans we are realigning our management structure,” said Isaac Awuondo, the group chief executive as he was quoted by Kenya’s Business Daily newspaper.
Part of the CBA repositioning with intentions of having presence in 10 African countries including Mozambique, South Sudan, Uganda, DRC, Burundi and Ethiopia apart from Rwanda also entails the bank upgrading its core banking infrastructure to support cross border transactions as more Kenyan companies aggressively seek opportunities that East African Community(EAC) offers.
The Head of Investment Promotion and Implementation at Rwanda Development Board (RDB) Vivian Kayitesi termed the interest by CBA as part of a larger appreciation by leading companies in East Africa and the continent of Africa by directly showing an increasing eagerness to do business in Rwanda.
“It is a purely market driven move. We are seeing leading regional companies taking advantage of what Rwanda offers in order to expand their businesses”, Kayitesi added that: “such moves have other several advantages for our economy-a case being the trick down effects that will positively impact through forward and backward linkages on our Small and Medium Enterprises (SMEs) since a bank such as CBA will inject additional capital and much needed expertise into the economy”.