In a colorful event on 28th May, the Bank of Kigali (BK) launched its latest Agency Banking product dubbed “BK Yacu” at Nyirangarama in Rulindo district of the Northern Province. In the few months of its existence, the product has helped bridge the bank and the unbanked Rwandans thus exposing the later to the benefits of financial services as scored by almost all those who spoke at the function.
BK Yacu penetrating Rwanda’s unbanked population In a colorful event on 28th May, the Bank of Kigali (BK) launched its latest product BK Yacu at Nyirangarama in Rulindo district of the Northern Province. In the few months of its existence, the product has helped bridge the bank and the unbanked Rwandans thus exposing the later to the benefits of financial services as scored by almost all those who spoke at the function.
BK Yacu is an agency banking product which involves the bank recruiting local businesses to carry out daily transactions like opening new accounts, deposits and withdraws. The agents who are initially BK clients go through a period of selection and are then listed to the National Bank of Rwanda (BNR) for approval. According to Dr. James Gatera the Chief Executive Officer of BK, the product reduces the need for heavy investments in branch network expansion yet at the same time making it possible for BK to reaches out to the clients in the most remote areas of the country with its numerous products.
Kizito Okute is the bank’s Agency Network Manager. He noted that BK Yacu which was instated in the later days of 2012 had reaped at least 2000 new accounts by the time of its official launch and the average daily deposits with the agents stood at Rwf120million at the particular period.
Kizito added that the agency network is also growing satisfactorily with many more people requesting the bank to become agents. “There are 550 agents who have been recruited by the bank, 450 of whom have been approved of by the Central bank and are already transacting.”
By year end, the bank targets to have 1000 agents across the country implying at least an agent for every sector. Access to financial services by the population helps increase the rate of economic growth and development of individuals and hence of the nation at large through harnessing the cultures of saving, investment and risk mitigation. Thus agency banking, which helps to bring such services closer to the people who would rather not be full reached by the conventional banking networks, is a strong catalyst in the equation.
According to Governor Aime Bosenibamwe of the Northern Province where BK Yacu was launched from, the Bank of Kigali’s recent moves of expansion have resulted into numerous benefits including among others unlocking business potentials areas in the particular region in which people had not invested before.
“I recall the first time we met with the BK boss and told him of the bountiful potentials that the Northern Province has to offer. Back then I was asking him to open a branch in Gakenye district where locals were experiencing limited access to credit facilities. He took heed of my plea and opened the branch and today this has become a win-win situation for both the bank and the clients it serves.”
Also, Governor Bosenibamwe projected that the impact that BK Yacu is going to is going to be far much exceeding what has been witnessed before in the banking sector in Rwanda.
However as scored by the BK Yacu agents, the story of the impact of this latest brainchild of the Bank of Kigali will not wait for the future so as to be told because it is already unfolding in the specific areas where the different agents are located.
Rwemarika Theogene a resident of Ngoma district in Sake sector of the Eastern Province tells of the former plight which involved travelling long distances to find a BK branch to work with that he and other residents in the area had to withstand. He is situated near the Rwanda-Burundi border and the nearest BK branch to where he is situated is at least 20miles away.
The distances between the people who desperately needed to be served and BK branches as scored by Rwemarika used to make it hard for many of the residents in the area to use the abundant products of the bank which he has come to realize are, “key for anyone who wishes to achieve their dreams”.
Now with the BK Yacu product, Rwemarika has been able to open over 80 new accounts in just a month and he expects the numbers to grow more in the near future now that more people in his area are waking up to opportunity that is being availed by BK agents.
Also, another of the benefits that BK Yacu has offered to the Rwandan people which none of the agents could skip to mention is the source of employment and extra income for the agents that it has created. Agents employ at times close to three people in each of their outlets.
Twagirayezu Pierre Celestin an agent of BK in Gisenyi who operates three outlets is one of the many that have benefited from the agent banking product from which he currently earns Rwf2million in form of commissions he gains for each transactions that he makes.
“I earn at least a million francs per month from each of the two outlets and I am yet to establish how much the new one which is less than a month old will be able to make. I have set a target for earning at least Rwf5million from the three outlets every month and this I want to achieve in the very near future,” an enthusiastic Twagirayezu offered. Security and quality services, BK’s priorities for agency banking
As critics for the recent developments like agency and mobile banking in the financial sector abound with criticisms ranging from poor services to insecurity, the Bank of Kigali assured both the clients and the regulators of the financial sector that it made a high investment in developing the product with an aim of ensuring that security is high and services offered are of the highest quality that can be achieved.
According to CEO Gatera, a series of trainings for the agents have been planned and this will ensure that a client who walks into an agency gets quality services just like they could receive from any branch across the country. Towards the end of ensuring that security is assured for the bulk of money that the agents collect, BK’s recently introduced mobile vans which move across the country will help in offloading cash from the agencies whenever needful. Currently the bank has a fleet of five vans but according to the bank’s management procurement is underway for five more vans to increase the impact that these vans will play in the success of not only agency banking, but has also made it a principle in operating the agencies that agents are situated in close reach of a branch and this is to ensure that the parent branch keeps watch on the operations of the agents inspecting whether the services offered are of BK’s high quality plus correcting any errors as soon as possible whenever need arises.
Also in ensuring quality services, Kizito scored that the agencies were categorized into classes from A to E. “The categorization will ensure that the bank facilitates particular classes of agents in specific ways so as to enable them address the needs of the segment of clients they serve. The recruitment of agencies was done following thorough market research.”Categories A, B, C, D and E are categorized basing on the bulk of transaction that a particular agent can be able to handle in a day. Class A can transact to as much as Rwf20million, while B, C, and D and E handle up to 10m, 5m and 3m respectively. Also the bank offers security to the A class agencies like one at Nyirangarama in Rulindo district of the Northern Province while continuing to monitor the progress of other classes of agents to ensure that any little need can proactively addressed. According to the Finscope Survey 2012, only 42 percent of adult Rwandans were served by the both the informal and formal financial sector despite an ambitious target of the Government to raise it to 80 percent by 2017.
The target of the Government of Rwanda however can only be achieved if the banks make aggressive efforts to pull new clients into the sector. Bank of Kigali as one of the local giants in the banking sector has a vital role to play in achieving the goal and creating products such as BK Yacu is of prime essence to hitting the set target in the specified time frame.“We are a Rwandan bank and our major target is to make the biggest contribution that we can to the development of the country by enabling fellow citizens to access affordable and high quality financial services; this is our drive,” Gatera offered during the launch of BK Yacu making a commitment that the bank will not rest until all the unbanked and the underserved Rwandans are reached.