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AfricaMarch 1 2012

Rwandan banks seek to boost profitability amid high growth

Rwanda’s banks have benefited from the country’s rapid development since its genocide less than 20 years ago. With a high unbanked population and expectations of continued near double-digit economic growth, their rise is unlikely to slow soon. But the banks will have to boost their efficiency quickly if they want their profitability to match that of other east African lenders. 
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Rwandan banks seek to boost profitability amid high growth

Rwanda’s development faces no shortage of obstacles. The small east African country of just 11 million people has few natural resources, a low export base and sits more than 1000 kilometres from its nearest coastline, making it logistically difficult and expensive to bring in much-needed imports. With a gross domestic product (GDP) of just $6bn, it is one of the world’s poorest countries.

Yet since its genocide in 1994, when Hutu militias massacred between 800,000 and 1 million Tutsis and moderate Hutus in just over three months, Rwanda has made plenty of progress. Thanks to rigorous government reforms over the past decade and foreign aid, it has been one of the world’s fastest growing economies in recent years. GDP expanded 8.8% in 2011 and is forecast to increase 7.6% this year.

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