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BRD starts own insurance brokerage firm

Emmanuel Karuranga

Emmanuel Karuranga, director of credit administration at BRD. (file photo)

Clients of the Development Bank of Rwanda (BRD) no lon­ger need to look any far for insurance services after the bank re­cently added insurance brokerage to a growing range of products it provides customers under one roof.

BRD Insurance Brokerage (BIB) was unveiled to the bank’s current and po­tential clients on March 22 in Kigali.

BIB will enable BRD clients to un­derwrite insurance policies and en­sure up-to-date protection against any risks, said Emmanuel Karuranga, the director of credit administration at BRD.

According to Karuranga, the bank had in the past outsourced brokerage services to renew policies for its cli­ents but the process was not efficient and it did not result in timely services.

Bank clients, particularly, borrow­ers require insurance cover for prop­erties or assets mortgaged with banks for loans. Customers also need to in­sure properties and assets acquired through leasing or through money borrowed from banks against any risks. This is in the interest of both the bank and it clients.

“In the past, we have used existing brokerage companies to renew insur­ance policies for our clients but this did not work well,” Karuranga said.

He said that the launch of BIB is in fulfilment of BRD’s commitment to keep introducing new products annu­ally and to continually keep improv­ing services provided to clients.

Insurance brokerage services will almost certainly be good business for BRD because it positions the bank closer to the fastest growing industry in Rwanda’s finance sector today.

Figures from the regulator, the Na­tional Bank of Rwanda (BNR), reveal that the Insurance sector grew by 36% during the past 12 months ending De­cember 2012 with gross premiums in­creasing by 67% from Frw 45 billion in 2011 to Frw 77 billion. Total assets reached Frw 214 billion up from Frw 157 billion of the previous year.

While keeping its tradition of being a development bank and its mandate as the private sector lending arm of the Rwanda government, BRD has in­deed over the years introduced tailor-made products akin to some offered by commercial banks to make its ser­vices more appealing to customers.

For example, following acquisition of the former Rwanda Housing Bank, BRD has broadened the range of prod­ucts available to clients with the intro­duction of retail banking services.

This means that BRD now provides over-the-counter operations, cash de­posits and other direct services to cli­ents with running loan obligations with the bank.

Therefore, clients who meet the re­quirements to open accounts with the bank can now be facilitated to open accounts such as Saving, Housing Savings Plan and Foreign Currency account.

Saving account is for people with regular incomes such as monthly sala­ry earners in the private or public sec­tor who signup to receive their sala­ries through the bank so as to qualify for mortgage, car loans or salary ad­vance.

That is why BIB becomes a timely addition to the list of products as cli­ents will no longer have to look far to access insurance brokerage services. This service is particularly important considering the fact that as a develop­ment bank, BRD finances big invest­ment projects that cannot be left with­out up-to-date insurance cover.

Benjamin Manzi, the director invest­ments said that BRD priority areas in­clude agriculture—the country’s main economic activity where the bank funds projects in coffee, tea, pyre­thrum and livestock. Last coffee sea­son, BRD’s credit finance to the sector hit a record Frw 8 billion.

Other priority sectors include indus­try, hotel and tourism, microfinance refinancing and social infrastructure such as schools and health facilities.

Manzi told clients that housing is another strategic development area that the bank has prioritised for fund­ing with money available for real es­tate developers or mortgages for indi­vidual housing needs.

Some of the ways of accessing loans for individual housing is via the Hous­ing Savings Plan account—a kind con­tract between the bank and the client.

It is suitable for people who are not regular salary earners but can com­mit to deposit a specific amount for an agreed period so as to qualify for a loan in future.

This is based BRD’s seeks to ensure that for a client to qualify for a mort­gage, they must be able to raise a per­centage of the total cost of the project.

Retail products

According to Manzi, BRD now pro­vides a range of retail products such as letters of credit, overdraft, equip­ment financing, bid guarantee, ad­vance payment guarantee, invoice dis­counting and swift transfer.

Core products however remain loans, equity financing, leasing, refi­nancing through microfinance institu­tions and mortgages.

BRD plans to take services closer to customers by signing up agents, intro­ducing mobile banking vans and au­tomated teller machines to boost its limited branch network. BRD operates only three representative offices out­side Kigali.

Posted by on Mar 31 2013. Filed under Business, Other News, Weekly Highlights. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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