Kenya’s CBA gears up for expansion into Rwanda

Rwanda’s central bank says it is processing a licence application by Commercial Bank of Africa (CBA) to enter the country by March.

Rwanda’s central bank governor John Rwangombwa was quoted in a Rwandan publication saying the National Bank of Rwanda is in the final stages of licensing the Kenyan headquartered CBA to operate in the country.

An operating licence would come as a huge boost for CBA, which has for long set its sights on launching its mobile products in Rwanda to expand its regional footprint and drive growth.


In October, CBA said it was eyeing the Rwandan market with its M-Shwari mobile money service after successful uptake in Kenya, Uganda and Tanzania.

The bank, which recently announced that it had signed up more than 600,000 subscribers in Uganda on its mobile-banking platform (MoKash) in partnership with MTN Uganda, said Rwanda’s growing mobile penetration will be key in the plan set to be rolled out by December.

CBA chief executive Jeremy Ngunze said at the time that the service would leverage on the same advantages it has over other banking channels to record success in Rwanda as it has done in the three East African countries.

“We have people in some of these countries who are able to move cash on mobile among themselves but the gap that exists in savings and borrowing remains unexploited. The privacy and convenience that comes with borrowing on your mobile phone are our key strengths and we will use raw data to drive this crucial service. We are looking at Rwanda in quarter four and other countries will follow,” Mr Ngunze said then.

M-Shwari now has 16 million customers in Kenya with 80,000 users borrowing on the platform daily. This has seen some Sh106 billion disbursed in the region as M-Shwari loans remain unaffected by the capped interest rate.

Some of the other Kenyan lenders operating in Rwanda include KCB and Equity.

Mobile phone subscription in Rwanda had hit 8.807 million in March 2016, according to the Rwanda Utilities Regulatory Authority subscription statistics.

Tigo Rwanda, which had 3.1 million active subscibers in March last year, could be the most likely partner in the venture.

M-Shwari also plans to venture into other markets which the CEO said would be defined by mobile phone access and data availability.

CBA’s after-tax profit grew 52.7 per cent in the nine months to September helped by non­interest earnings from M-Shwari fees. The privately­ held bank reported Sh3.9 billion in net earnings at the end of the third quarter.

The mid­tier lender saw its non­interest income from fees and commissions, mainly M-Shwari one-­off charges, grow 70 per cent to Sh4.15 billion in the period under review, and was a key driver of the profit growth.

This growth was faster than the 11 per cent increase in interest income from loans to Sh10.3 billion, and the 17 per cent growth in earnings from government securities to Sh5.1 billion.

CBA’s loan book contracted by Sh6.3 billion to Sh106.5 billion in September 2016 from Sh112.8 billion the year before.