East African Business Week

KIGALI, RWANDA - Bank of Kigali (BK), Rwanda's largest bank in terms of asset base, says it will increase lending following signing of a US$20 million line of credit with the French Development Agency.
The bank was also trusted to host a 6 million Euro Guarantee Fund to support Small and Medium Enterprises (SMEs). SMEs in Rwanda continue to claim that their major issue is access to credit.
The Bank's officials said credit would see an increase of additional Rf20 billion ($33,726,812) this year from Rwf110 billion ($185,497,470) last year.
The bank also projects a high net profit in the first three months of 2011, because of increased lending. Net profit is expected to more than double to Rf2 billion($3,372,681) from less than one billion in the same quarter last year.
BK, a government owned Bank, is also expected to raise additional investment capital through an Initial Public Offering (IPO) expected this year.  The government seeks to sell 25% of its shares to the public through the Rwanda Stock Exchange (RSE).
BK will be the first Rwandan bank to list on the stock exchange and the second Rwandan firm to raise capital through an IPO after Bralirwa, the leading brewery in the country.
 Currently, only Kenya Commercial Bank, Nation Media Group and Bralirwa feature on the Rwanda Stock market.
BK's line of credit comes following a government request to the International Monetary Fund (IMF) to allow the Bank to access non-concessional loans.
IMF had said that if BK goes for short-term commercial borrowing, the debt would increase government's debt burden.
However, the government explained that the bank would use its assets to pay back the loan and it would not get a government guarantee. Rwanda's banking sector has been on the bullish mood since last year but competition remains invisible in sector.
Meanwhile, it is expected that once Kenya's Equity Bank enters Rwanda anytime soon, competition will start.