Rwanda Focus (Kigali)

19 November 2012

Rwanda: BRD Restructures Rural Branches to Boost Outreach

The Development Bank of Rwanda (BRD) has reorganized some of its branches upcountry in a bid to get closer to customers and provide them with effective services.

Effective August this year, BRD closed its branch in western province based in Karongi and moved the Huye branch to Nyanza so as to enable it also serve clients originally served by Karongi. The former Karongi branch took care of Karongi, Nyamasheke, Rusizi and Rutsiro district.

Management said that it was noticed that owing to the poor road connection between Karongi and Rusizi, it was difficult to reach the districts of Nyamasheke and Rusizi--both of which were monitored were under the branch in Karongi. This meant that officers often approached the two districts through Huye--a three-day journey.

It was therefore decided that Nyamasheke and Rusizi would best be served by the Huye branch. However, it was also decided that in order for Huye to effectively monitor its expanded area of operation, the branch was to be relocated to Nyaza district. Since October, the Huye branch has been moved to Nyanza from where, in addition to its previous area of operations, it now monitors projects in Nyamasheke, Rusizi and a part of Karongi that were originally serviced by Karongi Branch.

According to the director of credit administration, Emmanuel Karuranga, it is easier to cover some areas of Karongi through the new southern province branch in Nyanza. "This has helped us improve our coverage and monitoring. We could also reduce our costs and yet do the job better," he said during an exclusive interview last week.

Under the new structure that has seen the bank's branches reduced from four to three, the headquarters in Kigali now monitors the remaining clients in Karongi and Rutsiro districts.

BRD started rolling out branch net work in 2006 with the opening of representative offices in Rusizi and Musanze. In 2010, two more branches were opened in Huye and Kayonza while at the same time relocated the one in Rusizi to Karongi.

Unlike commercial banks, BRD branches are largely representative offices that identify potential projects for funding, offer monitoring services and provide technical assistance to funded projects to ensure success.

The branches also help in efficient disbursement of loans, handle the recovery process as well as play the marketing function of the bank in the areas of their jurisdiction.

"For a long time, BRD was based in Kigali and there was need to make it more visible in the country. That is why the BRD Board of Directors decided to open branches," Karuranga said.

According to Karuranga, this move has since paid off with the number of projects funded by the bank in rural areas increasing substantially.

In line with playing its role as the development financing arm of the government, BRD is funding agricultural projects in rural areas such coffee, livestock, cassava. This year alone, BRD projects to allocate more than Frw 19 billion to agriculture, coffee and tea projects as it positions itself as a leading source of funds for the sector that is so critical to the country's economic growth but is perceived as highly risky by commercial banks.

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