Almost a year after President Paul Kagame promised to give a bank to members of the Rwandan Cooperatives, the process for its establishment still hangs in balance.
Members have told KTPress that the project doesn’t seem to come through.
“We thought the bank would be operational in one year since 60% of needed resources are available,” Focus Karambizi, a frustrated member of a Farmers’ Cooperative said.
Cooperatives, especially those for farmers, are desperately looking for a financier. For them, access to credit is very problematic.
Even for a handful that have managed to secure loans, they pay astronomical interest rate of up to 21%.
The Rwanda Cooperative Agency (RCA), the umbrella of all cooperatives in the country, has already placed Rwf 3 billion on the table, which is 60% of the initial capital of Rwf 5 billion ($7 million) required to set up a bank in Rwanda.
RCA in collaboration with Ministry of Trade and Industry to find an investor to take up the remaining 40% (Rwf 2 billion) stake.
Bids for a potential investor were issued late last year, but until now there has been no prospective investor. “We have no investor to take 40% yet,” Trade Minister Francois Kanimba told KTPress.
Meanwhile Minister Kanimba is under pressure to meet the President Kagame’s deadline of June to have finalized plans to establish the bank.
“We are thinking of approaching Rwanda Development Bank (BRD) for a possible take up of these shares,” he said.
BRD is 75% owned by Atlas Mara Limited, which has announced interest to buy 45% stake in another local bank, Bank Populaire, but has not yet been engaged for stakes in the cooperative bank.
“We have not received them. They cannot express interests before the bank is established,” Emmanuel Hategeka, Permanently Secretary at MINICOM told KTPress.
With over 2.5million members from 4000 different cooperatives, Rwanda Cooperative Agency has a total investment capacity of over Rwf 150 billion ($216 million), but lacks expertise to run a bank.