High cost of credit takes toll of businesses in Rwanda
Saturday March 7 2015
A Bank Populaire du Rwanda stand at a trade fair in Kigali. Banks in Rwanda charge interest as high as 20 per cent, pushing up cost of operations. PHOTO | FILE
This has been blamed on poor loan repayment due to lack of profitability, lack of collateral, outstanding loans in various banks and bad credit histories.
The banks blame low levels of savings, which limits their source of deposits.
Central bank Governor John Rwangombwa said weak responsiveness of the lending rate to the change in the key repo rate is due to among other factors, high operating costs in the banking sector and high provisions for bad loans.