AB Bank offers a broad range of financial services to micro, small and medium-sized enterprises (MSMEs). The bank is positioning itself to become a ‘house bank’ or bank of choice for many MSME. AB Bank Managing Director, Arah Sadava explains how the bank has grown in the recent past and its expansion programs in the future.

The landscape
The banking industry in Rwanda has grown significantly in terms of assets, composed mainly of loans disbursed to businesses and individuals. This shows an increasing relationship between the banking sector and the public. The increased deposits are also an indication of growing public trust. These improvements have been aided by the favorable legal framework which is supportive of banks and public interest.

The competition among the banks and the MFIs has also increased. This brings about the innovation of financial products and services, which subsequently lead to greater financial inclusion.

Branch network

AB Bank Rwanda currently has 5 branches; 4 of which are located in Kigali and 1 in Musanze. Initially,there were four branches in Kigali because of its bustling commercial activities but in July 2016; the first upcountry branch was opened in Musanze. This branch is considered to be the “flagship branch for rural finance” because it expands the bank’s regional outreach, and makes AB Bank’s operations accessible to even more customers across Rwanda. It also facilitates the increase of financial inclusion in the Musanze region.

The Bank aims to provide responsible financial services to low and middle income households and in particular to micro and small businesses. It strives to be the ‘house bank’ (bank of choice) for the MSME market by offering all the financial services that they usually need. AB Bank believes that the MSME sector is vital for the development and diversification of the economy, the creation of jobs and the reduction of poverty. Beyond credit and deposit products for MSME, the bank also offers deposit products and services with attractive terms and conditions to the corporate and retail sectors. Inaddition, it offers customized deposit accounts that also come with full range of other services, such as international, regional, and local transfers, performance guarantees, forex services, currency auction services, etc.

Key investments in the past 3 years

AB bank’s key investment is in the human resource department. When the bank started 3 years ago, it deliberately recruited fresh graduates, or very young and relatively inexperienced employees. Thereafter, it began investing in training, coaching, and mentoring them. In less than 2 years, most of them have been promoted to higher positions like the senior officers or BM roles. As for the heads of department, most of them were senior officers when they started with the bank, but have now grown to become full-fledged managers. The bank provides both local and international training opportunities; as well as coaching sessions (In Rwanda or with other sister banks in many other countries across the globe). In 2016, it also made the decision of filling senior management roles from the banking industry. This is a big investment which has made the bank grow sustainably.

Impacting livelihoods

The bank hears client testimonies from time to time. It also takes time to gather data on a number of women served, number of new jobs created, and increase in the customers’ net income overtime. The credit products provided enable most, if not all of our clients, to buy additional inventories, acquire new business assets (such as photocopying machines, trucks, computer units, etc.) to replenish their respective businesses. Some of the clients were able to expand their businesses, such as putting up a new shop in another part of town. And a few of them were able to purchase land, or put up a house, as a result of their improved income.

The bank currently does not provide products on housing, agriculture, and education. However, it is worth to mention that this year; it has provided the financial literacy training to selected SME clients in cooperation with the European Investment Bank (EIB). While impact fromthis training remains to be seen, it has received very good feedback from our SME customers who attended this training. They now have a better perspective on cash management, debt management, and savings.

Future

As mentioned above, AB Bank would want to be the ‘house bank’ or bank of choice for many MSME. This entails, however, ensuring that its products and services are accessible to its customers. This year, therefore, the bank is planning to start a digital finance platform. It plans, not only to provide convenient channels to its clients, but more so, digital finance products that meet its customers’ needs. The bank aims to support the country’s plan of developing a robust cashless economy.

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