Cell 0788308572 April 28th, 2020

Fitch Rates Development Bank of Rwanda (BRD) PLC at ‘B+’

Outlook Stable – First Bank in Rwanda to be rated

Kigali, April 28, 2020 – The Development Bank of Rwanda (BRD) Plc is the first Bank in Rwanda to be rated by Fitch. In the past, Fitch has only rated the Sovereign (i.e. Government). Through this inaugural rating, Fitch has rated BRD as a B+ Stable outlook which is the same rating as the Government of Rwanda.

FitchRatings made the announcement early this Monday assigning BRD a Long-Term Issuer Default Rating (IDR) of ‘B+’ with a Stable Outlook. Fitch has also assigned BRD a Support Rating Floor (SRF) of ‘B+’ and Support Rating (SR) of ‘4’.

This underlines the Institution’s standing compared to the best banking standards and practices. The rating further validates the Bank’s recent improvements, growth prospects and continued expected financial stability. The rating will also play a major role in strengthening BRD’s capability to attract new strategic financial partners to enable it to play a more prominent role as the only development bank in Rwanda. One of the strategic objectives of BRD in the medium term is to increase its capacity to leverage longer term funding at attractive rates for economic actors in Rwanda.

BRD Management welcomed the news with great optimism. The CEO, Ms. Kampeta SAYINZOGA stated

“We have come a long way and we are very encouraged by this rating which comes amidst tough times. Our rating is attributed to the strong support BRD has received from its shareholders to turn the Bank around in a very determined way. The BRD team is working relentlessly to live up to the expectations of its shareholders and ensure productive use of capital. This rating will also be instrumental in supporting our upcoming effort to diversify our capital base in the medium term. It re-energizes our endeavours to deliver on our mandate to sustainably improve the socio-economic development of Rwandans.”

What are the key drivers for the rating?

BRD’s ratings reflect Fitch’s view of the current financial status of the Bank and the commitment of its majority shareholders (i.e. the Government of Rwanda) to position the Bank as a strategic vehicle to implement the National Strategy for Transformation (NST1) and the Sustainable Development Goals (SDGs). BRD is indeed expected to play a major role in driving Rwanda’s transformational economic agenda. The Bank’s strategy has been assessed in this light and has been rated accordingly.

As Rwanda’s sole development bank, it has been found by Fitch that its unique business model would be difficult to be replicated by other domestic financial institutions. BRD Plc is 97%- owned by the government, via the Agaciro Development Fund (Rwanda’s sovereign wealth fund, 55%) and the Rwanda Social Security Board (42%) and is overseen by the Ministry of Finance.

BRD has recently benefitted greatly from several capital injections which have strengthened its ability to deliver on its ambitious developmental objectives. The Bank is regulated by Rwanda’s Central Bank, and is subject to compliance with the prudential requirements, albeit with certain exemptions (in particular for asset quality, loan restructuring and FX risk management).

Since 2016, BRD and its Stakeholders started initiating turnaround and transformation strategies that have concretely strengthened the Bank and contributed to its improving financial profile. The Bank’s performance has significantly improved with losses reduced by more than 77% in 2019 compared to the previous two years. This performance has mainly been driven by the recovery efforts on the written off book and stopping migration of good loans to bad loans which has made the Net impairment charge on loans and advances to significantly reduce by 31% compared to the previous year. The close monitoring of our customers has resulted into significant improvements of the Bank’s non-performing ratio that has dropped from 19.34% 2018 to 7.52% end 2019.

It is worth noting that BRD’s performance continues to be affected by relatively high funding costs and large FX translation losses due to its unhedged foreign currency funding. Measures are being taken by management to address these issues in consultation with the regulator.

Like all policy banks, BRD has a higher risk appetite and finances emerging industry sectors and customers that commercial banks tend to view as “too risky”. Lending is typically longer term (average tenor in the book is 84 months) and on more favourable terms, including longer grace periods.

A full statement on the announcement and/or interviews can be availed on request, or visit

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