The war affected the
whole of the Banking sector. Non-performing loans
represent the main burden of the industry. What
has been the Union des Banques Populaires' policy
over the past eight years to recover from those
events and rebuild a sound portfolio?
The Union des Banques Populaires is a cooperative
for savings and credit created in 1975. At the
beginning, it was based on a cooperation between
the Swiss and the Rwandan governments in order
to use the experience from Swiss banks organized
as cooperatives and transfer it to our country.
At first, nobody really believed it would be profitable
to establish a bank in rural areas due to the
population's low incomes. But, when we first set
up a bank in the east of Rwanda, the enthusiasm
was so great that the agricultural cooperatives
and the population started to save the little
money they had and it finally proved to be a good
investment. Thereafter, those savers started asking
for micro-credits. The success of the Banques
Populaires led to the creation of 130 of them
over the country with 4 bn FRW of deposits and
2 bn FRW of loans by 1994. The war of 1994 seriously
damaged our portfolio. We accumulated a lot of
bad loans due to the death of a large number of
beneficiaries and the destruction of most of the
collateral. At the same time, the agreement between
the Swiss and Rwandan governments expired. All
these left the Banques Populaires in a terrible
financial situation.
But, step by step, we re-opened all the branches,
the population kept on trusting us and we even
created 18 more. So, we have now 148 Banques Populaires.
Today, we have 15.7 bn FRW in deposits and 8 bn
FRW in loans. Also, the government, with the support
of the World Bank, has been very supportive. They
acknowledge the fact that our institution had
a key role in the socio-economic development of
rural areas and populations with low incomes.
The institution is to receive a financial support
of USD 5 million which is enough to counterbalance
the costs and losses generated by the war. We
are also benefiting from a technical Assistance
program implemented by the World Council of Credit
Unions funded by USAID. The main benefit from
this program by the Banques Populaires is "Financial
Disciplines".
Today, has your portfolio of clients the same
profile as before the war?
Before 1994, our portfolio was mainly composed
of farmers. After the war, as the agricultural
sector suffered a lot, we started attracting more
civil servants, traders and cooperatives.
The government is encouraging the banking
sector to innovate in order to support more efficiently
the SMEs and your institution is definitely the
most involved in this sector. What are, today,
the new tools or products that would enable you
to answer the SMEs' needs?
Of course, our development strategy has so far
mainly been focused on targeting SMEs even if
they are riskier than any other type of customers.
However, over the past few years, in collaboration
with the World Council of Credit Unions, we have
developed new methods for risk evaluation that
enable the banks to estimate the repayment capacity
of those SME through an exhaustive analysis of
their accounts.
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Are you now looking for potential partners
in order to consolidate your activity or develop
new projects?
We have already developed projects with the World
Bank, the International Fund for Agricultural
Development (IFAD), the African Development Bank.
We entered into technical partnerships where the
population could become sensitised upstream and
downstream on techniques of production and distribution.
Among the various projects we want to develop
is the implementation of Western Union money transfer.
The Commercial Bank of Rwanda (BCR), which is
already working with Western Union will be our
partner in this project.
The National Bank introduced in 1999 a new
banking law and various measures related to banking
supervision have been implemented in order to
improve management efficiency and mitigate risks.
How do you perceive those measures and their impact
on your activity?
We did not suffer too much from the introduction
of the new banking law as the National Bank did
not force the institution to comply straightaway
with all aspects of the law. For example, our
capital being composed of shares from the population,
we did not have to increase the capital to the
same extent as any commercial bank. However, we
have felt we had to make an effort to increase
our capital and have increased the minimum share
value paid by individual members from 1000 FRW
to 5,000 RFW in the rural areas and from 5000FRW
to 20000FRW in the urban areas. So, step by step,
we are increasing the capital up to the level
imposed by the National Bank to the sector.
How do you see the development of your bank
in the medium term?
We have a business plan which runs up to 2004.
This bank used to be regularly supported by subsidies.
But in 1994, it stopped. So, we had to restructure,
reduce expenses, innovate and find new products
to increase incomes. We closed the year 2001 with
a profit of 344 million FRW (740,000$) and we
have adopted a guideline that will enable the
bank to maintain a steady growth rate.
There are not many women holding such a position
in the banking sector. Can you tell us more about
yourself and what brought you to current responsibilities
in this institution?
I studied Economics at the National University
of Rwanda. I am also a graduate of "Institut
Technique de Banque de Paris" where I obtained
an Advanced Diploma in Banking Techniques (Deplome
d'Etudes supérieures en Tehniques Bancaires).
I worked for eight years for a State-owned company,
the Office for Commercialization of Food Crops,
where I was in charge of budget control. After
the war, I joined the National Bank and worked
in the Department of Monetary policy. In 1996,
I was appointed 1st female Director of the Department
for Monetary Policy. So, I worked six years in
the department and got to know pretty well all
the problems that the Union des Banques Populaires
was facing. In 2001, the Union des Banques Populaires
du Rwanda was looking for new management. Given
my knowledge of the difficulties the Union des
Banques Populaires was facing at the time and
some additional training in banking, I felt I
could put the bank on the right track and applied
for the position. I got accepted and started as
MD in January 2001. The task was tremendous: the
bank used to work with negative budgets, and we
had to review all our expenses, reduce the staff
from 131 to 90. In addition, we put a lot of efforts
in trying to maximize our incomes, improve our
products and from June 2001, we started to make
some profits.
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RWANDA
