VENTURES AFRICA – Kenya’s regional bank, I&M Bank Limited (I&M), and French and German development finance institutions, Proparco and DEG have bought the interests of private equity firm Actis, in Banque Commerciale du Rwanda (BCR). The sale of Rwanda’s second largest bank has been hailed as a privatisation success story for the region.
BCR which has been named ‘Best Bank in Rwanda’ by Global Finance Magazine for the last five years seeks to become a leading East African financial institution. Actis acquired an 80 percent interest in BCR in a 2004 privatisation, with the remaining 20% interest was retained by the Government of Rwanda.
Rwanda’s Minister of Finance and Economic Planning, John Rwangombwa has welcomed the new investors adding that the sale was a testament to the attractiveness of Rwanda as an investment destination.
“The successful equity exit of Actis reflects the investment opportunities that the Rwandan Government has helped foster. The privatisation of Banque Commerciale du Rwanda in 2004 through a private equity investment was the first of its type in the Rwanda banking sector and has been highly successful. Rwanda is committed to creating a financial sector that is inclusive and accessible to allow Rwandans to take advantages of all its services.” said Rwangombwa.
Actis’s strategy at BCR was to strengthen the management team and introduce a world-class board. The fund was influential in recruiting and training local Rwandan staff to create a centre of excellence within the country’s banking sector was a priority. The banks range of services was also broadened with a particular focus on SMEs, mortgage finance, and innovative leasing and savings products.
“The story of BCR is the story of Rwanda’s success. If we think back to 2003/4, the financial services sector was largely undeveloped and in need of capital; a large proportion of the population was unbanked. There has been extraordinary progress in the past eight years with the creation of a growing and competitive financial services industry at the heart of a thriving economy.” said Paul Fletcher, Senior Partner of Actis.
Actis plans to invest $200 million in East Africa over the next four years. So far it has invested over $300 million in among other businesses the Ugandan electricity distributor, Umeme, Kenyan power generator, Tsavo, as well as a suite of real estate investments including Nairobi Business Park, and Capital Properties in Dar es Salaam.