Atlas Mara Limited has completed the purchase of a majority stake in Banque Populaire de Rwanda (BPR), clearing way for a merger with BRD Commercial Bank that will see it become one of the largest lenders in the country.
Agreements for the transaction were reached in October last year.
BPR, the name of the combined entity, will be Rwanda's second largest bank by assets estimated at $325 million. It will also have the largest distribution of branches.
Atlas Mara acquired BRD Commercial in October 2014.
The London Stock Exchange-listed private equity fund is owned by former Barclays Bank executive Bob Diamond and Ugandan entrepreneur Ashish Thakkar. It plans to invest $21 million (Rwf15.3 billion) in BPR.
Atlas Mara will own 62 per cent of the combined entity before purchase of outstanding shares from investors who acquired the bank's stock during its cooperative days.
"After the transaction the local individual shareholders and Rabobank will remain the minority shareholders," Konde Bugingo, the CEO of BRD Commercial said.
The deal took a while to conclude because many of the individual shareholders had not been registered.
"Efforts have been made to register the local shareholders until there were no more registrations being done" said Bugingo.
Atlas Mara also has interests in Botswana, Mozambique, Tanzania, Zambia, Zimbabwe and Nigeria. Its ambition is to become a leading financial services group in Africa.
Financial analysts say more players in the Rwanda market could help customers enjoy lower interest rates and increase financial inclusion. Commercial banks account for 66.6 per cent of the total assets of the financial sector, followed by pension funds (17.7 per cent), insurance companies (9.8 per cent) and micro-finance institutions at 5.9 per cent, according to central bank data.