Bank of Kigali Ltd., Rwanda’s biggest lender by assets, plans to introduce agency banking in the second quarter to expand its share of retail banking in the East African nation, said Chairman Lado Gurgenidze.
The move will enable the bank to tap potential customers who currently don’t have access to a bank account and offset increased competition, Gurgenidze told investors today in Kigali, the capital. Under the agency-banking system, agents at locations including supermarkets and gas stations are able to dispense cash and take deposits.
The “recruitment of 400 existing businesses, as agents, is underway and the service will help the bank compete and position itself as the leading lender, while reaching the unbanked,” Gurgenidze said.
Rwanda plans to increase the number of people with a bank account to 80 percent of the population by 2020 from 21 percent now. Bank of Kigali will become the third lender to introduce agency banking, after Equity Bank Ltd. (EQBNK) of Kenya and Kenya National Bank Ltd. (KNCB)’s Rwandan unit introduced the service in the East African country.
The Rwandan lender also plans to open 12 more branches by the end of this year, bringing the total to 56, Gurgenidze said.
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