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Interview: Bank Of Kigali CEO, Dr. Karusisi Speaks About COVID-19 Effects To Banking In Rwanda




What has COVID-19 done to us? The recent World Bank report says the pandemic is dramatically increasing poverty in both rural and urban areas. The headcount poverty rate is likely to rise by 5.1% points (more than 550,000 people) in 2021, compared to the no-COVID scenario.

The increase in urban areas is greater than the increase in rural areas, the report says. Lockdowns, and other measures, which were critical to limiting infections, sharply curtailed economic activities.

GDP in real terms fell by 3.6% (y-o-y) in the third quarter of 2020, following a 12.4% contraction in the second quarter. The government expects that GDP will fall by 0.2% for 2020, compared to a projected expansion of 8% before the COVID-19 outbreak.

While the pandemic affected all major sectors, education and Rwandan strategic sectors (travel and hospitality) declined the most.

For the banning sector, the Central Bank introduced an extended lending facility to support banks facing liquidity shortfalls, and other factors.

Banks remained in sound condition, based on the share of non-performing loans in their portfolios and capital risk-weighted assets ratio, but newly approved loans were 9.2% lower in October 2020 compared to the same period in 2019.

There is a view that large corporations have not been affected that much. Rwanda’s leading Bank, Bank of Kigali (BK), would be an ideal template to assess real effects of the pandemic.

BK’s CEO, Dr. Diane Karusisi spoke to Taarifa’s Chief Editor, Magnus Mazimpaka, about the banks experience and her views on what’s coming next.

Describe the nature of effects, materially, strategically and operationally, caused by Covid-19

Dr. Karusisi: The COVID crisis exacerbated all risks the Bank manages: Credit risk (risk of loss resulting from inability of clients to meet their commitments), market risk such as  liquidity and operational risks including risks of fraud, cybersecurity risks as most transactions move to digital. As a result, the Bank has significantly increased provisions for expected losses, which will heavily impact our financials.

In a tightly regulated industry like ours, with heavy procedures and processes reliant on paper and physical contact, operating effectively in a virtual environment has presented great challenges. We were able to speed up implementation of some projects to reduce/digitize physical touch points internally and with clients in a way that improves service delivery but also helps people comply with health measures. The crisis has reinforced our strategic drive to digital with a focus on connectivity, automation and innovation to reduce turnaround times and improve customer experience.

What lessons has the pandemic taught you, technologically in regards to banking….

Dr. Karusisi: The key lesson is that business continuity and resilience is not just a document/policy – banks like all other businesses need to up their preparedness in terms of technology, people, processes, and financial resources. Companies with better financial cushions and resilience will not only survive the crisis but will be the first to innovate and grow after the crisis. We entered the crisis with strong capital and liquidity ratios, and this has helped us weather the storm. Also, more than ever, we have realized that digital is not the future, it is the present! Going connectivity, digital education, and access to devices will be critically important for people to get access to all kinds of services: banking, health, education, entertainment, etc.

What are your new norms. What adjustments have you considered?

Dr. Karusisi: For many companies, remote meetings are now a norm, and signing/approving digitally documents. We’ve discovered that there are excellent solutions to support remote work and remote collaboration, and we expect to extensively use post COVID.

Now that many businesses have taken massive blows. Are you considering an overhaul in product offerings, financing structures, requirements ?

Dr. Karusisi: When the crisis hit, we waived late payment charges, restructuring fees to support businesses with uncertain cash flows. The Bank later provided relief in the form of moratoriums, refinancing and affordable working capital facilities availed by the Government’s Economic Recovery Fund. Finally, we have closed partnership with KFW and are supporting severely hit businesses with grant funding to protect employment.

In terms of product offering, it is obvious that the risk appetite has reduced and we are more cautious in our lending business. There are sectors that will see less financing like hospitality, commercial real estate but I believe agro processing and light manufacturing are going to see a boost, as we want to build resilience at national level.

Tech must have been a saviour of the tough times brought up by Covid-19. Tell us about the experience…were you prepared? What challenges did you encounter, how did you deal with them…what methods did you use…?

Dr. Karusisi: Nobody was prepared to this level of disruption.  At the Bank, we setup a COVID crisis committee that was meeting (virtually) every morning to assess the situation and make quick decisions. The first thing was to protect employees’ and clients’ health across the branch network. We had to offer extra support to our staff on the front lines, organize remote work to support our clients, and scale systems capacity to respond to the exponential surge in digital transactions. In the end, it is always about people and we will keep investing in people – skills, leadership – to build resilience to withstand shocks in the future.

Tell us what your predictions are, based on what you have experienced….

Dr. Karusisi: The level of disruption brought by COVID is such that it will result into profound changes in behavior/preferences of customers – at work, at school, at home, etc. Some pre-existing trends have been dramatically accelerated, such as e-commerce, cashless payments. I believe some new trends will emerge as people have become more health-conscious, less mobile… All industries will be impacted and it is important for us to recognize these trends early, adjust our business models and strategies.

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Kagame Advocates For Investment Into Africa’s Agriculture Value Chain



Agriculture and agri-business, especially in Africa, will drive the continent’s attainment of the Sustainable Development Goals, President Paul Kagame has said.

“This is especially true as we work to make
up for the time lost to the Covid-19 pandemic,” he said adding that, “Each country and region must chart its own pathway to transformation, but this is also a global challenge that we must address together.”

Kagame was speaking in his capacity as the Chair of the African Union Development Agency-NEPAD, Heads of State and Government Orientation Committee at the official ceremony of the UN Food Systems Summit 2021 Pre-Summit.

In Africa, he continued, 70% of the working-age population is employed in the agricultural sector.

“But our continent’s food markets are often fragmented, and links to food processing and value addition services are sometimes lacking,” the President said.

He noted that digital technologies and biotechnology are playing a greater role in African agriculture, but too many farmers do not yet have reliable access.

And that financial services and products for farmers, including insurance, are generally inadequate.

“As a result, Africa’s food producers do not earn the level of income that they deserve, and they must cope with high levels of economic risk and uncertainty,” Kagame added.

According to the Executive Director of the UN World Food Programme, David Beasley, 41 million people are on the brink of famine today.

“Planet earth, shame on us that we let a single person go to bed hungry,” said.

“We have the expertise to end hunger, but we urgently need the money. This is a global call to action – all hands on deck,” he added.

Transformation is a necessity, according to Presidemt Kagame.

This is why the African Union Development Agency, NEPAD, has worked to facilitate an African Common Position in advance of the Food Systems Summit, in line with the African Union’s Agenda 2063 and the SDGs.

Kagame offered two proposition.

Africa will pursue solutions in the following priority tracks:

One, adopt nutritious food policies, establish food reserves, and expand school feeding programs.

Two, support local markets and food supply chains, invest in agro-processing for healthy foods, and expand trade in food products within Africa.

The UN Secretary-General’s special envoy for the UN’ Food Systems Summit, Agnes M. Kaliba,  told participants that the summit is much very powerful than she thought.

“The energy,  and hopes in each room today were palpable!. We need to leverage the incredible power of food to deliver a step change in the SDGs- this is a one in a generation opportunity,” she said.

Myrna Cunningham, speaking for Indiginous People, said that, “Our current Food Systems is based on extreme irresponsibility; We need a food system that is based on rights including Economic empowerement and rights and rights to land.”

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Airtel Rwanda MD Steps Down



It is learnt through reliable sources that Amit Chawla has decided to step down after completing a three-year term as Managing Director for Airtel Rwanda.

Normally, he would have had his contract extended or rotated to another operation in the company’s footprints, but a source told Taarifa that he is leaving the industry to do other businesses.

A new executive will be announced soon, it is said.

Amit, who took over the newly merged entity on August 31, 2018, during which time he oversaw the achievements of several milestones.

Chief among his accomplishments include the consolidation of the brand Airtel after the takeover of Tigo, its people, products and services as well as modernization of the country’s network, a project that saw the expansion of the Airtel Rwanda Network and saw the consolidation of Airtel’s reputation as the internet provider of choice for Mobile Internet in Rwanda.

During his time with the organization as MD, Airtel Rwanda oversaw great changes. Under his leadership, programs grew and services became more easily available to all customers.

Chawla led the company’s pandemic response that saw Airtel Rwanda direct its CSR budget towards governments efforts to tackle the initial response to the Global pandemic.

Under his leadership, Airtel has gained a reputation for launching ground breaking and bold campaigns such as the recent Va Kugiti Campaign that generated a lot of buzz in the Rwandan market.

Chawla, also oversaw the successful roll out of the Airtel Money Branch (AMB) concept, with 71 shops opened in Kigali alone.

The AMB’s concept has completely revolutionized the proximity of a telecom operator to her network of Agents and Freelancers, enabling them to access up to Rwf5 million within walking distance.

Chawla was unavailable for comment.


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First Chinese Electric Car To Reach Europe Disrupts Markets



Chinese automaker Aiways has resorted to livestreaming its all-electric cars to potential clients across the globe.

“The design is very simple and uncluttered,” one of the presenters said as she detailed the U5’s design and capabilities. “The car is modern, and even the mode of distribution is modern.”

“Modern” distribution here means replicating the “live commerce” experience of Aiways’ home country — using livestreaming events to drum up interest and sales online. The company ships its cars through local partners to customers in Europe from its factory in the eastern Chinese province of Jiangxi.

That arrangement helps Aiways keep prices down. The U5 is priced from around 39,000 euros ($46,000), 10% to 15% cheaper than its rivals, according to the company.

Alexander Klose, the Aiways executive vice president in charge of overseas operations says, “We have some challenges, but overall, I would say it has been fairly positive for us, and we have seen a fairly positive recognition.”

Aiways is not alone: A growing number of Chinese EV makers are setting their sights on overseas markets — and they intend to compete on quality as much as price.

BYD, the Chinese automaker backed by U.S. investment guru Warren Buffett, is betting on Norway. It shipped its first 100 European-specification SUVs to dealers there this June, and it plans to deliver 1,500 by the end of the year.

Like Aiways, BYD is keen to take advantage of overseas consumers’ improving perception of Chinese products.

“We are not going to make the same mistakes as other Chinese brands did more than 10 years ago in the European theater. They tried to launch vehicles in a very cheap and rushed way, without being fully prepared,” a BYD spokesperson told Nikkei Asia.

“Most people haven’t heard of BYD until now, so it is more important to do things right than [to] start talking about [sales volume].”

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