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MIGA has issued a guarantee of $1.8 million to ShoreCap International (SCI) of the Cayman Islands covering its equity investment in Companie Générale de Banque in Rwanda (Cogébanque). The coverage is for a period of up to six years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The project consists of an investment by SCI and two foreign sponsors to help Cogébanque improve its services and to satisfy the recent increase in the minimum capital requirement to RWF 5 billion (approximately $9.2 million) mandated by the Rwandan Central Bank. Cogébanque was established in 1999 and has experienced steady growth for the past five years. The bank offers deposit mobilization products and credit facilities to corporations, small and medium-size enterprises (SMEs), retail clients, and individuals. SCI will provide technical assistance to Cogebanque in the following areas: strengthening credit services for SME; developing internal audit and controls; developing its human resources department; and ongoing training and coaching in key areas.
Fostering broad-based growth in rural economic activity and in the private sector, including SMEs, is an important element of Rwanda’s continuing economic recovery. The investor is committed to providing quality financial services to SMEs, which, despite existing efforts within the financial system are finding it difficult to access bank loans. In addition to its core loan products, deposit services will play an important part in the bank’s overall outreach. Of all the fully licensed commercial banks, it has the widest branch network and widest customer base among the rural population.
MIGA’s participation in the project is aligned with the agency’s priority of supporting investments in sub-Saharan Africa and into IDA-eligible (the world’s poorest) nations. The project was underwritten through MIGA’s Small Investment Program.