KIGALI, Sept 4 (Reuters) – Rwanda’s Bank of Kigali has sold a 30 percent stake in its general insurance business to Swan General of Mauritius for 860 million francs ($978,116.13), the bank’s chief financial officer told Reuters on Tuesday.
The lender, which is Rwanda’s biggest by assets, plans to enter into the life insurance business, which is largely untapped in the country. It hopes the partnership with Swan, will help it make headway, said Nathalie Mpaka, the bank’s CFO.
“The only way of course will be through acquisition of an existing company,” she said in an interview, citing a lack of new licences for the life insurance business.
“We have not yet agreed which company to acquire but we know that we want to go further into insurance and life insurance is the next product that we want.”
Bank of Kigali plans to increase the issued share capital of the insurance business, which is called BK General Insurance, to 5 billion francs from 2.9 billion currently, which will include Swan shelling out another 640 million francs in relation to its stake, Mpaka said.
Bank of Kigali plans to list stock on the Nairobi Securities Exchange in the second half of this year as part of a drive to raise up to $70 million for investment, its chairman said in May.
The lender, which was started 52 years ago and has 76 branches, saw its pretax profit rise by a third to 22 billion francs in the first half of this year.
There are 16 insurance companies operating in Rwanda including two companies owned by the government.
Insurance penetration in Rwanda remained low at 1.7 percent as of June this year, unchanged from the same period last year, the central banks said. ($1 = 879.2412 Rwandan francs) (Writing by Duncan Miriri Editing by Ingrid Melander and Kirsten Donovan)