Banks in Rwanda urged to do more to help local companies access over $1.7 billion (1.3 trillion francs) worth of business
KIGALI, 29 June, 2016 – Rwanda’s economy continues to impress with annual real GDP growth rates averaging 8% for over a decade. The African Trade Insurance Agency (ATI) has played a role in this success by supporting trade and investments. Announcing the company’s 2015 results during its 16th Annual General Meeting in Kigali, ATI urged banks to take advantage of its products to help more local companies access critical financing and credit facilities. ATI noted a $1.7 billion (1.3 trillion francs) volume of untapped business in its pipeline for Rwanda.
In 2015, rapid infrastructure development fuelled ATI’s performance in Rwanda. During a press briefing held during the AGM events, the Hon Minister of Finance and Economic Planning, Amb. Claver Gatete, added “There is a lot of potential for ATI to make a difference in other areas of Rwanda’s economy such as agricultural exports, where its products could help companies safely expand into new markets.”
In addition to its corporate mandate to maintain profitability, ATI also has a developmental mandate aimed at helping member countries achieve sustainable economic development. Banks are the natural conduit for helping ATI realise both mandates by financing small and medium-sized (SMEs) companies in local markets. SMEs represent up to 80% of the economies of most African countries but banks are often hesitant to lend to them because they lack the necessary collateral to cover their loans. With ATI’s support, banks are able to “In the past year, our business in Rwanda has nearly tripled to over $110 million (86 billion francs) in current exposure. But this has mainly been on the investment side. We want companies in Rwanda to take advantage of our trade products as well,” commented ATI’s Chief Executive, George Otieno.
protect their balance sheet against payment default risks, allowing them to lend more to this vital sector.
“In the past year, our business in Rwanda has nearly tripled to over $110 million (86 billion francs) in current exposure. But this has mainly been on the investment side. We want companies in Rwanda to take advantage of our trade products as well,” commented ATI’s Chief Executive, George Otieno.
For exporters, ATI can work with their banks to secure its policy as collateral in exchange for credit. This unties the exporter’s cash, which banks often use to secure loans or credit lines.
ATI’s 2015 results show a five year growth trend. The company posted a record $4.7 million (3.7 billion francs) profit, an increase of 36% over 2014. In this period, ATI also doubled its business portfolio from $10 to $23 million (7.8 to18 billion francs). Alongside growth, ATI also increased claims payments, disbursing a record $8.7 million (6.8 billion francs), a 34% increase.
The Ministry of Finance and Economic Planning hosted ATI’s Annual General Meeting. Rwanda is a founding member of the institution with $8.7 million (6.8 billion) in share capital of which ATI has leveraged nearly 50 times to insure transactions worth over $425 million (332 billion francs) into the country over the last seven years.