BRD starts own insurance brokerage firm
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.
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.