• Reference: P-RW-HAB-001
  • Approval date: 04/11/2010
  • Start date: 27/02/2013
  • Appraisal Date: 15/06/2010
  • Status: OngoingOnGo
  • Implementing Agency: BANK OF KIGALI
  • Location: Rwanda


The proposed transaction is a USD 12 million Line of Credit, split into USD 8 million as sub debt and USD 4 million as senior loan Banque De Kigali to meet it's need for long-term funding, the LOC will be up to 10 years with a grace period of up to 2 years. BK's principal credit products are overdrafts, short, medium, and long-term loans. These are funded mainly by deposits with terms ranging from 1 -9 months and current accounts; both interest and non-interest bearing. The proposed Line of Credit will enable Banque De Kigali provide long-term financing to various sectors. The proposed LOC, the first to BK from the ADB's private sector window, will support BK priority sectors, including agriculture, mining, manufacturing, energy and water, public works and construction, trade and tourism, communication and services


To make available long term funding to BK's clients, strengthen BK's balance sheet by making available Tier 2 capital and upgrade the skills levels of BK's staff


BK offers an opportunity for the ADB to engage with an important local development partner with a good local presence and the reach necessary to deliver broad-based financial support to key sectors of the economy at a time of a severe global financial crisis. This will contribute to the restoration of liquidity in the system and ensure continuation of vital economic activity and as a result, enhance the credibility of the ADB as a partner capable of providing the right response at the right time and in the right places. It will leverage the ADB funded PRSSP-III's expected outcomes to include:

(i) improved Rwanda's ranking in Doing Business index;

(ii) deeper access to credit by the private sector; and

(iii) enhanced financial governance as reflected in improved Public Expenditure and Financial Accountability (PEFA) scores.


The main beneficiaries of the propose lines of credit would be BK, its stakeholders, and the Small and Medium-sized enterprises (SMEs) engaged in productive sectors of the economy i.e., Agriculture value chain activities; manufacturing, tourism and hotel development etc.

Details are as follows: Economic performance. Currently BK has approximately 4,802 corporate and SME customers on its books, with SMEs comprising about 30% of total borrowers. The strategic plan intends to grow corporate and SME clients to 26,000 by 2017, and increasing SMEs share to 77%. Most of BK's SME clients operate in agriculture whilst the corporate ones operate in strategic sectors of the Rwandan economy such as agro-processing, tourism and manufacturing. The LOC is expected to facilitate an increase in the number of BK loan customers from current 3,018 to at least 5,000 by 2017 of which at least 70% are likely to be SMEs. The project team expects that the LOC will generate 2,075 jobs in the sub-projects. Approximately 60% of additional jobs created will be skilled workers and the beneficiary companies will increase their incomes by 10% over the same period.

Private Sector Development and Demonstration Effect: The proposed credit facility will enable BK extend long-term credits to enterprises and enable them restructure their own balance sheets, improving efficiency. The credit facility will help BK increase the range of products it offers to its customers catalysing competition and improving the skills levels of BK staff. Furthermore, the Bank's intervention will have a catalytic impact and will facilitate BK's efforts in mobilising counter-party finance. The credit facility intervention will help modernize Rwanda's financial system and availability of long-term finance. The immediate LOC impact will be to increase financial resources available to BK to on-lend to clients and bolster its balance sheet. Support to BK is therefore a suitable and sustainable approach to promoting and modernising the financial sector in Rwanda.

Impact on public finance: From 2006 through 2008, BK paid RWF8.5 bln in corporate tax. Projections are that BK will pay in excess of RWF40 bln during the period the credit facility will be on its books, with approximately 15% of this attributable to increased operating income as a direct result of the LOC. The Government will therefore benefit from the credit facility through the additional income tax collected from BK.

Infrastructure: Currently BK also loans to companies in the infrastructure business, including telecommunications infrastructure tot al approximately RWF 22 bln. The LOC will support the growth of this and other infrastructure sectors through the extension of long-term loans to companies directly involved therein.

Environmental Effects: In accordance with the Bank's Environmental and Social Assessment Procedures (ESAP), the project falls under Category 4 pertaining to operations with financial intermediaries. BK initially did a streamlined Social and Environmental Management System (SEMS) during project appraisal, though in its day-to-day operations BK complies with national environmental laws and regulations. BK has submitted to the Bank a draft SEMS document in order to comply with the Bank's requirements. The requirement to have a well established SEMS is a condition to first disbursement.

Social impacts and gender: It is expected that the sub-projects financed by BK through the LOC will generate positive socioeconomic benefits and will contribute to national poverty reduction efforts in Rwanda. The financing will ensure the spur of new employment opportunities across key sectors. The LOC is expected to promote entrepreneurship, allowing for the emergence of new entrepreneurs/ micro-entrepreneurs and furthering the growth of select existing entrepreneurs. These enhanced opportunities geared at employment and entrepreneurship will also afford women the means to benefit significantly, heightening their participation particularly in agriculture sub-projects in which women constitute a critical mass of the labor and production force. Job created as an impact of the LOC will benefit 30 % for women, and 40 % for the youth. OPSM has agreed to cooperate with the Rwandan Women in Business Association to guide on ways and means to create a referral system between the association and BK. In strengthening local companies, especially SMEs, the LOC will indirectly facilitate the economic empowerment of the beneficiaries through increased revenues, increased income, and/or increased capital.

Key contacts



Finance source Amount
ADBUSD 7,608,661
Co-financierUSD 3,766,287
DeltaUSD 3,441,268
TotalUSD 7,933,680
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