4 3 .THE RATIONALE FOR BANQUES POPULAIRES TRANSFORMATION FROM
COOPERATIVE TO A COMMERCIAL BANK.
According to the findings from the respondents during this study,
the main reasons for bank populaires transformation from a cooperative to a
commercial bank were:
- Acquiring license to offer a full range of financial services
in urban and rural areas;
- Strengthening the bank capacity to grant loans;
- To foster and strengthen high service quality and customer
care;
- To upgrade its core business from being a cooperative that
offers basic savings and credit services to becoming a fully fledged retail
bank;
A number of respondents stated that«mbere y'uko banki
ihinduka banki y'ubucuruzi ntitwabonaga amafaranga uko tubyifuza, batangaga
amafaranga make cyane kandi ibyo byatumaga abanyamuryango bakeneye amafaranga
menshi bigira mu mabanki y'ubucuruzi meaning that before the bank become
transformed from a cooperative to a commercial bank, it did not granted to us
loans as required, they granted a very little money and this caused the flight
of a good number of customers who needed a good amount of money».
Before the transformation of banques populaires from a
cooperative to a commercial bank each bank was financially and administratively
independent credit union; the fact that each bank was independent, the separate
independence for each credit union limited the capacity for granting loans in
favor of clients and this fact led to the desertion of customers who needed a
reasonable amount of loans.
In terms of loan granting capacity, the transformation of banques
populaires from a cooperative to a commercial bank led to the consolidation of
separate credit unions assets first and second to acquire the bank license
where there is no restriction on the percentage of loan to be granted in favor
of one person or one group of person compared to the total deposits.
According to the interviews the
majority of customers interviewed: «the waiting time for withdrawals or
deposits have relatively reduced compared to the time used before the
transformation of banques popularizes into a commercial bank».
(a) Front office staff has been reinforced,
(b) The time to wait at the counter has been
significantly reduced.
Crucial in this development are the investments in buildings.
Banking offices in all branches are being redesigned to become:
· Modern and professional
· spacious and bright
· customer friendly
Each branch has a VIP (Very Important Person) reception area
while the head office has a new corporate office for this new customer Segment
and the VIP cards are provided; so that VIP customers are served at any branch
and sub branch or outlet without delay and all this to offer quality
services.
According to BPR S.A articles of association, after the
transformation of banques populaires from a cooperative to a commercial bank;
the purpose was both for itself and on behalf of third parties, to carry out
all banking operations, particularly the following:
- Performance of all banking operations relating to discounting,
rediscounting and commission,
- Receipt of deposits,
- Issuance of short-term, medium and long-term loans,
- Effecting the transfer of funds and assets,
- Performance of all stock exchange and currency exchange
transactions,
- Investment and participation in any company that already exists
or is yet to be established, within the limits laid down under the relevant
legislation and regulations,
- Performance of any investment relating to movable or immovable
assets,
- Performance of any operations likely to benefit the development
of any type of company in Rwanda and abroad,
According the views from customers interviewed in this research
at the headquarters: before the bank was transformed from a cooperative to a
commercial bank, there were a good number of services that were not offered by
the bank which are actually now offered. Some of them are:
- Exchange of foreign currency;
- The use of checks as means of payment;
- Issuance of smart cards;
- Deposit and withdrawal anywhere on the computerized
branches,
- International operations, etc
The customers interviewed confirm that after the transformation;
services are upgraded compared to the services offered before the bank was
transformed.
According to one of the interviewed customers in Nyagatare
branch.» ubu igihe twamaraga ku murongo dutegereje kubitsa cyangwa
kubikuza cyaragabanyutse ku buryo bugaragara kandi n'uburyo batwitaho
bigaragaza ko habaye impinduka koko« meaning that «now the time for
waiting to be served depositing or withdrawing is considerably reduced and the
way that we are cared shows that there is a change indeed«.
Although it is difficult to evaluate the impact of this
transformation after only approximately one year and a half of operations in a
new system, according to the findings from this research mainly from the board
of directors interviewed it should be stressed that a positive impact is quite
visible:
- The increase of the number of customers after the
transformation,
- The volume of collected deposits,
- The volume of granted loans,
- The new products introduced after the transformation and some
of which the banks were not allowed to carry on as cooperative banks.
- The impact can also be seen in the promotion of financial
sector in Rwanda.
- Bank management efficiency is high.
As depicted in the table and graph below, the number of
depositors has increased with 137% in five years; in 2008 the growth was
28.2%
Table 5: Evolution of Depositors In Five
Years
|
Years
|
Number of depositors
|
|
2004
|
398,799
|
|
2005
|
473,547
|
|
2006
|
551,401
|
|
2007
|
687,332
|
|
2008
|
991,919
|
Source : BPR Annual Report 2004 - 2008
Graph 1 : Evolution Of Depositors In Five
Years
After BPR transformation, it has managed to set up the following
new products:
- Gwiza savings account
- Hirwa savings account.
GWIZA SAVINGS ACCOUNT
It is a savings account with the following features:
- Minimum deposit to open the account; 100,000 frw.
- Make monthly deposits to the account of minimum 25,000frw
- Maturity is 6 months renewable.
- No withdrawals are allowed from the account except with a
notice period of 91 days.
Benefits of gwiza savings account
- Interest earnings of up to 7% per annum depending on amount
saved.
- The interests are calculated monthly and paid at the expiry of
the six months;
- This account gives the owner preferential eligibility for a
personal loan in BPR SA
HIRWA SAVINGS ACCOUNT
The new hirwa savings account is designed to enable every Rwandan
to save for a better future.
It is a savings account with the following features:
- No age limits to opening this account
- No minimum opening amount required
- One accumulates his/her savings by freely depositing money in
his/her account
- After 12 months, he/she earns interests on his/her total
savings
- He/she can only earn interest when his/her account balance is
20,000rwf and above
A customer is discouraged from making withdrawals. But he/she is
allowed one emergency withdrawal as follows:
° Before 6 months are up, he/she earns no interest
° After 6 months, she/he earns 50% the normal interest
The more the balance of the hirwa savings account, the higher
the rate of interest to earn.
The following table and chart show the five year evolution of
deposits of banques populaires showing the impact of banques populaires
transformation; Most members of board of directors interviewed recognized that
the transformation impacted the growth of deposits.
Table 6: Evolution of Deposits in Five Years
|
Years
|
Amount of deposits frw(000)
|
|
2004
|
23,401,307
|
|
2005
|
23,887,644
|
|
2006
|
46,923,246
|
|
2007
|
63,781,798
|
|
2008
|
77,600,156
|
Source : BPR Annual Report 2004 - 2008
Graph 2 : Evolution of Deposits in Five Years
The total balance has almost tripled in five years; in 2008 the
growth was 22%
THE VOLUME OF GRANTED
LOANS.
As shown in the table and chart below, the total loans and
advances increased by 45 % in 2008; this increase is in relation with the
increase in deposits and equity whereby the capital has increased with the
investment of rabobank of frw 4,877,581,000, all these are the results of the
transformation of the bank from a cooperative to a commercial bank.
Table 7: Evolution Of Loan In Five Years
|
Years
|
Amount of net loans frw(000)
|
|
2004
|
19,601,034
|
|
2005
|
20,161,934
|
|
2006
|
47,429,246
|
|
2007
|
57,067,076
|
|
2008
|
82,877,982
|
Source : BPR Annual Report 2004 - 2008
GRAPH 3 : EVOLUTION OF LOANS IN FIVE YEARS
Going commercial BPR upgraded its core business from being a
cooperative that offers basic savings and credit services to becoming a fully
fledged retail bank.
The new status acquired by the bank after transformation
conferred upon it the license to offer additional services that it was not
allowed offer. After the transformation the bank set up new departments and
launched new products in line with the new status acquired.
BPR SA set up of a commercial department having under its
portfolio product development, business Development and marketing.
In product development, new products have been launched as part
of the fulfillment of BPR's Mission of offering a wide range of financial
services in both urban and rural areas. These include:
· Domestic money transfer among our branches using BPR
mobile counter
· Account services in foreign currencies (usd and
euro)
· International money transfers via swift
· A new savings account: gwiza savings account
In business development, a corporate unit was set up as a move to
add the corporate segment to a wide retail customer base. This unit has of late
been very active in recruiting;
· Individual corporate clients
· SME's
· Private and public institutions
Western union
Western union that was operated under the license of banque
commerciale du rwanda (BCR) is now operated under BPR's license.
Western union is the world's premier international consumer money
transfer system. It is the best and most reliable way to send and receive
money, person-to-person, country-to-country within a very short time.
Western union money transfers are particularly useful in
emergency situations, when money is needed urgently, because of the speed of
the service. As an important service for its customers, BPR offers this service
at all its branches.
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