Inside Kenyan companies minting billions in Rwanda

By Wycliffe Nyamasege
On 3 May 2024 at 01:55

Rwanda continues to offer fertile ground for Kenyan businesses to thrive in the wake of increasing competition at home and in the region.

Rwanda ranks second on the African continent in terms of ease of doing business and 38th globally, according to the World Bank.

One of the attractive sectors that continues to mint profits for Kenyan firms listed on the Rwanda Stock Exchange (RSE) is the banking industry, which has attracted major Kenyan banks among the more than 20 banks, microfinance institutions, and rural savings and credit cooperatives operating in the country.

Equity Bank which opened a subsidiary in Rwanda in the fourth quarter of 2011 continues to thrive in the local market due to its focus on empowering and elevating communities at the grassroots level.

With headquarters at Grand Pension Plaza in the capital Kigali, Equity has expanded to open 46 branches and 56 ATMs across the country.

Equity Bank Rwanda was ranked third among banks licensed by the National Bank of Rwanda in terms of reported total assets, amounting to RWF 682.9 billion as of September 30, 2023.

The bank completed a merger with Cogebanque on November 30, 2023, increasing its total assets to RWF 989.7 billion, positioning itself as the second-largest bank in the country by asset base.

Additionally, the bank reported growth in its deposits, reaching RWF 749.7 billion, along with an expansion to 4,516 agents and 1,777 merchants.

Kenya Commercial Bank (KCB) is another banking giant from Kenya operating a subsidiary in Rwanda.

KCB Bank Rwanda, which entered the Rwandan market in 2014, completed the acquisition and merger of the Rwandan lender Banque Populaire du Rwanda (BPR) in 2021 and renamed it BPR Bank Rwanda Plc.

The merger which took effect on April 1, 2022, positioned BPR Bank Rwanda Plc as the second largest bank in Rwanda, before Equity acquired Cogebanque and became the second largest bank in Rwanda in terms of asset base.

BPR, with over 150 branches countrywide, registered RWF 25.8 billion in profit after tax in 2023. The lender also recorded a significant increase in its total revenue, marking a 13 per cent rise to RWF 81.1 billion. The customer deposits also rose by 33.4 per cent to hit RWF 589 billion.

In the same period, the bank’s total assets also registered a substantial growth of 15.2 per cent to reach RWF 860 billion.

Other Kenyan banks with subsidiaries in Rwanda are I&M Bank and NCBA.

I&M Bank Group from Kenya ventured into the Rwandan market in 2012 with the acquisition of the majority stake in Banque Commerciale du Rwanda (BCR).

I&M Bank Rwanda’s net profit for the year ending December 31, 2023, increased by 15 per cent, largely driven by growth across all business segments.

In audited financial results announced on March 22, 2024, the bank disclosed that its profit after tax rose to RWF 10.7 billion from RWF 9.3 billion in 2022 with the headline earnings rising by 18 per cent to hit RWF 46.7 billion.

On the other hand, NCBA began operations in Rwanda in 2017 with a micro-finance license.

In March 2018, the bank merged with Crane Bank and received a license in July 2018 to operate as Commercial Bank of Africa (Rwanda) PLC. The bank later changed its name to NCBA Bank Rwanda PLC on October 15, 2019, after the Board of Directors’ resolution to harness the strengths of NCBA Group PLC.

The bank recently announced a net profit of RWF 6 billion for the year 2023, an increase of 70 per cent compared to the 3.5 billion Rwandan francs recorded in 2022.

Besides the banking sector, a number of Kenyan companies are operating in Rwanda in different sectors including the media, where the Nation Media Group (NMG) leads the pack.

NMG, which was listed on the RSE in November 2010, mainly operates a regional paper, The East African, in Rwanda.

The company also operated KFM radio station before it shut down in 2016 over financial constraints.

NMG has operations in print, broadcasting and digital media in Kenya, Uganda and Tanzania. The brands include NTV Kenya, NTV Uganda, Daily Nation (Kenya), Taifa Leo (Kenya), Daily Monitor (Uganda) and Mwananchi (Tanzania), among other products.

Other sectors Kenyan companies have invested in Rwanda are construction, insurance, aviation, education, agribusiness, tourism and hospitality.

In the insurance sector, Britam Insurance in Rwanda traces its roots to Kenya and is among the leading insurance firms offering services to Rwandan communities.

In the education sector, Mount Kigali University was previously a campus of Mount Kenya University in Kenya. On April 20, 2023, after an elaborate process that lasted more than five years, it was granted full accreditation to operate as Mount Kigali University.