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.
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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