The processes of issuing financial credit involves corruption tendencies which need to be eradicated, officials have said.
This was revealed on Tuesday during a consultative meeting organised by the Office of the Ombudsman to discuss measures for preventing and fighting corruption in financial services.
During the event, officials from various institutions talked about the challenges that the financial sector is facing, and among these, they pointed out corruption and bribery involved in the process of issuing credit to people by banks and other financial institutions.
"At times, people applying for credit are told to pay a certain amount of money as a bribe during the process. In addition, there is when clients are told to pay bribes so that they can get lower interest rates. We have seen such problems in regard to the issuance of credit by financial institutions," said Gerard Nsabimana, the Director of Consumer Protection at the National Bank of Rwanda (BNR).
Due to such and more, sometimes businesspeople fail to implement their projects because the bribes reduce their capital, according to Nsabimana.
"We also have delays. A person may ask for credit but there are times when it takes five months, one year, or even two years before they get it. At times they may end up not getting the credit at all," he noted.
He also cited corruption tendencies involved in property valuing processes where some officials undervalue people's property during auctioning exercises that ensue after failing to clear bank loans.
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"A collateral of about Rwf 300 million can be auctioned at about Rwf 50 million. We need to work together so that such problems get solved," he said.
To address such issues, BNR always tasks financial institutions to provide reports to it showcasing how they fight corruption internally. Among the things that BNR orders financial institutions to do is to have clear and safe mechanisms for whistle-blowing by clients who are subjected to bribery demands.
Besides that, the Rwanda Financial Intelligence Centre (FIC), an institution established by the government 2 years ago to protect financial systems by countering money laundering, financing of terrorism and financing of proliferation of weapons of mass destruction, also contributes in monitoring suspicious transactions.
Jean Marie Nyirirugo, the Head of Department for Policy Analysis at FIC said bribery goes hand in hand with money laundering, "since people who take bribes will always try to conceal the money."
So far, FIC has received up to 374 suspicious transactions since it was established.
Madeleine Nirere, the Ombudsman, said there is need to put effort in teaching employees of the financial sector about the culture of integrity and refusing bribes, as one of the ways of fighting the vice.
In addition, she also called for more to be done in regards to auditing the financial institutions' operations.
