21 May 2012

Rwanda: Retail Banking Unveils New Opportunities At BRD

The recent introduction of retail banking has helped BRD broaden services offered to clients as it positions itself to be the bank of choice for individuals and businesses looking for short and long-term credit.

The new developments come on the heels of BRD's acquisition of Rwanda Housing Bank.

Clients, who meet the requirements, can now open accounts such as Housing Savings Account, Housing Savings Plan and Foreign Currency account for Rwandans working abroad.

According to the director of operations, Evode Nshimimana, the savings account is for people with regular incomes such as monthly salary earners in the private or public sector who signup to receive their salaries through the bank. The advantage is that they get to enjoy loan facilities such as mortgage, car loans etc that the bank offers.

Housing Savings Plan account, according to Nshimimana, is like a contract between the bank and the client. This type of account is also suitable for people who are not regular salary earners but can make a commitment to deposit a specified amount for an agreed period, say 3 years. "So, on a monthly basis, a client deposits a certain amount and after three years, they can apply for a loan.

"When client get loans, we open for them current accounts through which they service the loans," he said.

This arrangement is based on BRD's cardinal principle that for a client to qualify for a mortgage, they must be able to contribute 10% of the total cost of the project. This, clients do through saving.

Rwandans working in the Diaspora now also have a facility at BRD through which they can remit money home and save. For such people, the bank has introduced foreign currency account to facilitate them transfer money from wherever they work back home. Benefits include good interest rates and eligibility to apply for mortgage.

In the past, BRD funded only projects and was not involved in personal lending. However, it was realized that some clients who borrowed to finance projects such as mortgage loans are salary earners who also have other financial needs.

So the bank recently launched new lending facilities such as equipment loans, car loans, salary advance and temporary overdraft to help such clients have their loans in one bank instead of running around to look for loans in other banks. Moreover other banks may not lend to them because their salaries are channelled through BDR.

"As already mentioned, when these salary earners apply for mortgage loans here, they transfer their salaries to BRD. So they cannot benefit from loan facilities from other banks. So we help them get those new facilities from the bank," said Nshimimana.

Other facilities include equipment financing for household items like furniture as well as temporary advance for short-term financial needs. "While you wait for pay day, you might have some pressing needs, so you can come and we give you 50% of you monthly salary," he said.

The new products have already had a good impact on the bank's overall financial performance. While addressing shareholders during their recent ordinary general assembly, BRD board chairman, Fabien Majoro said that the acquisition of Rwanda Housing Bank enabled BRD to expand its services to include retail banking services and other over-the-counter services to customers.

BRD now provides services such as deposits taking and other direct services to customers.

"I am happy to inform you that this acquisition has significantly boosted overall operations of BRD with new products such customer accounts through which they can now make direct loan repayment deposits. This has therefore made loan repayment process much easier for customers," Majoro said.

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