Rawbank began its commercial operations in the DRC in May 2002 and today you are celebrating your 12th anniversary in the country. Could you provide us with a brief overview to the bank?
Rawbank is a fourth generation privately owned bank that was created 12 years ago by the Rawji family in the DRC. The bank was established at a time when the country’s banking industry was in difficulty and 12 years later we developed in the largest bank in the country in terms of total deposits, loan portfolio and total equity.
Rawbank was also the first bank to offer SWIFT solutions in the country and the first to introduce ATM services. We like to think of ourselves as a world-class innovative bank that is advancing technological breakthroughs in the DRC. We also recently launched a new pre-paid debit card called China Card to facilitate transactions for our clients when travelling to China and in 2013 we were the first bank to make Congolese Francs available at our ATMs.
What is the nature of the partnerships that Rawbank has with international institutions and what is the scope of these collaborations?
Rawbank is the only bank in the country to be dealing with international institutions. We have partnerships with the World Bank’s International Financial Corporation, the European Investment Bank and the French Development Agency and the aim of these collaborations is to advance the SME market in the DRC, which is still lacking in consistency and clarity. The French Development Agency is assuming a 50% participation risk in our portfolio, while the European Investment Bank is offering us longer term funding which is currently difficult to attain in the DRC.
What is the bank’s interaction with the retail and SMEs segments of the market in the DRC?
Retail banking is an accessible but competitive segment of the market in the DRC. Three years ago employees in mining companies were given access to personal loans benefits, starting on a three months’ salary basis to be reimbursed in 12 months. Today, Rawbank offer loans on a 15 months’ salary basis to be reimbursed in five years. On the other hand, the SME market remains challenging, as it is difficult to assess the risk of default. The majority of the SMEs lack in financial education and we therefore introduced a new project in partnership with the French Development Agency and Frankfurt’s Management School to better understand SMEs businesses. In general, we provide support in writing business plans, so that we can make better-informed decisions to assess our risk of default and Frankfurt’s Management School had the experience necessary to work with us on this project. In mining, the SME sector includes small service providers to the mining industry. Rawbank generally provides credit lines to those service providers to ensure that they can honour their contracts with mining companies and we therefore assume a small performance risk.
Rawbank has been instrumental in strengthening the trust in the Congolese banking sector. What have been some of the challenges of operating from a country like the DRC?
The main challenge for a financial institution in the DRC consists in logistics. Opening branches is expensive and on average banks have to invest between $600,000 and $700,000 per branch on communication networks. The movement of capital also represents a challenge. DRCs economy is mainly a dollar economy but finding dollars on the local market can be challenging, as dollars have to be imported from abroad and fraud crimes operated by foreign groups are also becoming an issue.
The short-term economic outlook in the DRC remains promising, with low inflation rates and economic growth forecasted at 8.7% of GDP and driven mainly by a buoyant mining sector. What should the role of the banking sector be to ensure that this growth path is actually maintained?
The role of innovative banks such as Rawbank should be to sustain the social development of the region and a major development was recently introduced in the public sector. Public officers, teachers and soldiers recently began to be remunerated through banks rather than on cash in hand basis. The reaction from teachers in remote locations was of utter surprise. Rawbank is investing on local low cost branches in remote locations to continue supporting the development of the Congolese economy. There is however plenty to be done still and the main challenge for banks will consist in raising long term deposits to be able to award longer term loans.