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Rwanda Business SeminarRwanda Business Seminar

Rwanda’s Financial sector

Paul van ApeldoornChief Commercial OffcierBanque Populaire du Rwanda

Wassenaar, 23 September 2011

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ContentContent

Rwanda Business Seminar Presentation

1. About BPR2. BPR – Rabobank partnership3. Overview of the Rwandan Financial Sector4. Conclusion

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About BPRAbout BPR

18 branches109 sub-branches61 outlets1 600 staff

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About BPR About BPR

1975: The first “Banque Populaire” is founded

1986: The various autonomous Banques populaires formed a:Union des Banques Populaires du Rwanda

2008, UBPR Turned into a full licensed commercial bank: Banque Populaire du Rwanda – BPR

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BPR – RABOBANK PartnershipBPR – RABOBANK Partnership

July 2008, RABOBANK acquired a 35% stake in BPR becoming a strategic partner:

• Technical assistance program• Management Services• International Transfer Partnership• Product Development• Agro Cultural Value Chain Projects

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BPR – RABOBANK PartnershipBPR – RABOBANK Partnership

September 2011

• 1,4 million customers • A solid retail, SME and Corporate portfolio• A widespread branch network • State of the art mobile banking channel• Growing ATM network• Developed product portfolio for all segments• F&A knowledge and project center • Best financial institute and investor of Rwanda

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BPR – Rabobank PartnershipBPR – Rabobank Partnership

Rationale for Rabobank to invest in Rwanda

Why Rwanda?• Economy strongly agricultural based• Stable environment• Clear governmental vision• Regional Focus (East Africa)

Why BPR?• Cooperative Background• Agricultural Focus• Natural Habitat rural and urban• Customer base

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Composition of the Financial sector in RwandaComposition of the Financial sector in Rwanda

8 Licensed commercial banks

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Banque Populaire du Rwanda

Banque Commerciale du Rwanda

Bank of Kigali Kenya Commercial bank

1 Development Bank (BRD)

Microfinance banks

122 Microfinance institutions

Savings and credit schemes

8 Insurance companies

1 Public Pension fund

A capital market

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Foreign investments into the sectorForeign investments into the sector

2004 2004 2005 2007 2006 2008 2009 2010 2011

Cogebanque

BPR

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The Rwandan Banking sector at a glanceThe Rwandan Banking sector at a glance

Professionalizing with the entrance of reputable regional and international players.

International: Rabobank. Regional: KCB, Equity, Ecobank

Financially sound looking at key indicators

Commercial banks indicators

2010 MLN USD Growth /2009

Balance sheet 1.214 25.9%

Deposits 900 27.4%

Net loans and advances 543 12.9%

Profit after tax 22 mln USD in 2010 from 6,3 mln USD in 2010

Capital adequacy ratio 22.3% compared to the minimum requirement of 15%.

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The Rwandan Banking sector at a glance (2)The Rwandan Banking sector at a glance (2)

Improving Financial Results

Ratio of liquid assets to total assets 55.6%

Non-performing loans: 11.3%

Increasing access to banking services: opening new bank branches: Introduction of mobile banking Extensive rollout of ATMs

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Market IssuesMarket Issues

Limited interbank money market, however enough market liquidity to ensure loan growth;

Limited currency hedge possibility, however stable USD / RWF exchange rate (EUR more volatile due to USD / EUR fluctuation);

Internal market limited growth potential / cash flow expansion, however EAC partnership increases market size and Rwanda still in many cases net importer

Staff quality, however improvement plans in place but that is a lengthy process

Lending Interest Rate high compared to matured markets• Quality of the loan portfolio• Cost of funding• Inflation

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Product PortfolioProduct Portfolio

Rwandan financial sectors offers a professional corporate product portfolio:

• Automated domestic transfers• Automated and swift international transfers• Long term Investment Loans (RWF / USD / EUR)• Working Capital Facilities• International Trade Financing • Full Fledged Current Account Offering (RWF / USD / EUR / GBP)

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ConclusionConclusion

The Rwandan Investment Climate

Challenges:

• Land locked• Natural Resources• Quality of skilled labor• Purchasing power• Internal market• Commercial legal system needs development

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ConclusionConclusion

The Rwandan Investment Climate

opportunities:

• Stable environment• EAC membership• Upwards market potential• Financial support possibilities (Subsidy / Grant / Guarantees)• Labor costs• Climate• Agricultural perspective

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ConclusionConclusion

The Rwandan Investment Climate

The financial sector in Rwanda has reached a stage of development allowing it to support international and national investments and business developments

Partnership with strong International Financial Institutes such as Rabobank (Triple A) secures professional international transactional services and trade finance execution.

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Rwanda Business SeminarRwanda Business Seminar

Thank you for your attention