AB Bank Rwanda (ABR) recently was granted the citation for ‘Exemplary Services 2017: Consumer Protection & SME Development,’ by the Association of Microfinance Institutions in Rwanda (AMIR) during the Association’s Annual General Assembly and 10th Anniversary celebration on 2nd November 2017. Consumer Protection is among the main areas of focus for AMIR, and the award was given to ABR after emerging the winner in the assessment done by the Association against the implementation of the seven customer protection principles, as outlined by Smart Campaign.
In the past years, the microfinance industry underwent intensified commercialization worldwide, and witnessed growing competition. This has increased the risk of short term profit seeking and, as a consequence, over-indebtedness, lack of transparency in relation to pricing, and inappropriate sales and collections practices. In this context, AB Bank Rwanda is conscious of its special responsibility when operating as a lender in the microfinance sphere. The main client groups of the bank are small entrepreneurs who often lack experience in banking and are mainly financially excluded. AB Bank puts significant effort to treat clients fairly and respectfully and to safeguard their financial soundness and sustainability.
Client Protection Principles Implementation at ABR
Being part of the Access Holding’s Network of 10 banks worldwide granted ABR leverage in winning this award, as Access Holding has in -place a customer protection policy, which AB bank abides by and has implemented. ABR takes adequate care in all phases of their credit process to determine that clients have the capacity to repay without becoming over-indebted. In addition, they implement and monitor internal systems that support prevention of over indebtedness and will foster efforts to improve market-level credit risk management.
Products and channels are designed to suit client needs, and in such a way that they do not cause clients harm. To ensure transparency, AB Bank communicates clear, sufficient and timely information on pricing & terms and conditions in a manner and language that clients can understand so that they can make informed and sound decisions. The bank’s service charter is designed in a transparent manner, to allow clients to know all costs associated with a product or service and clients are also provided with a Key Fact Statement (KFS) which was recently introduced by the Central Bank of Rwanda (BNR), and provides clear details of all charges that the clients are paying.
The Bank has also put in place procedures which require all staff to treat clients fairly and respectfully at all times, with no discrimination. It requires high standards of personal conduct which must include a strong personal commitment by each staff member to act with unquestionable honesty, integrity, impartiality, and respect for each individual in all dealings with fellow workers, clients and the general public.
To respect and protect the privacy of client’s data, AB Bank has put in place policies that govern the handling of client data and protection against data misuse by employees, related institutions or unauthorized external parties. To implement the final principle of client protection, ABR has put in place timely and responsive mechanisms for complaints and problem resolution for their clients and use these mechanisms both to resolve individual problems and to improve their products and services. Client feedback received via this mechanism has helped to implement changes that have led to improved services, such as extended branch opening hours to suit client needs.
This recognition of the bank’s efforts in protecting its clients is a welcome development as the Central Bank of Rwanda and the Government of Rwanda focus on ensuring that Rwandan consumer’s interests are protected by all industry players in order to improve the vibrancy of the economy. AB Bank is implementing a financial literacy program, with the underlying objective of ensuring that the Bank’s clients understand their rights, and have the knowledge to make sound financial decisions to improve their livelihoods.
AB Bank Rwanda Ltd was established in January 2014 as a Microfinance Bank, and is part of the Access Holding network of 10 MFI Bank’s which spreads across Africa, Europe and South America. The Bank is owned by highly reputable shareholders, who include Access Holding Microfinance (63.6%), IFC (19.9%), and KFW (16.5%). The vision of the Bank is to be the "One Stop" provider of ¬financial services to small and micro-businesses, and it currently offers a full range of banking products and services for both entrepreneurs and individuals in its five branches in Kigali and Musanze.
AMIR is the only umbrella body for microfinance institutions in Rwanda that seeks to build a flourishing microfinance sector in Rwanda through different areas of Advocacy and Information sharing, Research and Development, Responsible Finance, Performance Monitoring and Capacity Building. Currently, AMIR has 336 active members, serving poor and middle class families throughout the country.