COVID-19: What role can development banks play in Rwanda’s recovery?

The CEO of the Development Bank of Rwanda, Kampeta Sayinzoga, recently sat down for an exclusive interview with CNBC Africa to discuss the role of development banks in supporting the recovery of economies post-COVID-19. Sayinzoga highlighted the challenges faced by the bank in the wake of the pandemic, with a significant portion of their portfolio requiring restructuring as businesses grappled with the economic fallout. The demand for new loans also saw a decline as businesses tightened their belts amid the uncertainty. Despite these challenges, Sayinzoga emphasized the bank's commitment to pushing liquidity into the market to support businesses and prevent further exacerbation of the crisis. She also underscored the importance of embracing digital transformation, which has enabled the bank to enhance its portfolio monitoring and better understand the needs of its clients. Sayinzoga noted that the hardest-hit sectors in Rwanda included tourism, transport, commercial real estate, and education, with many businesses struggling to stay afloat due to the restrictions imposed during the pandemic. Looking ahead, Sayinzoga expressed optimism for a rebound in 2021, especially with the ongoing vaccination efforts, although a full recovery may take until 2022. She highlighted the need for patient capital at affordable rates to stimulate investment in key sectors such as manufacturing and real estate, which are essential for economic recovery. Sayinzoga also addressed the bank's commitment to supporting refugees in Rwanda, emphasizing the importance of empowering them economically and integrating them into the local economy. Additionally, she discussed strategies to improve access to business credit for women entrepreneurs, emphasizing the importance of formalizing businesses and guiding them towards sectors with higher profit margins. In terms of Rwanda's long-term strategy for post-pandemic recovery, Sayinzoga advocated for a fiscal injection approach, citing the government's revised budget as a step in the right direction. By leveraging fiscal policies and supporting key sectors, Sayinzoga believes Rwanda can navigate the challenges posed by the pandemic and emerge stronger in the aftermath.