KCB and equity banking units seek receivership of Kigali business center


The Rwandan subsidiaries of the Kenyan banks KCB and Equity are requesting the placement in receivership of Kigali Business Center for defaulting on the repayment of a 16 million dollar loan owed to the two lenders.

BPR Rwanda – a subsidiary of KCB after the merger of KCB Rwanda and BPR – and Equity Bank Rwanda have requested the Registrar General of Rwanda Development Board (RDB) to put the commercial complex in Kigali under statutory management to protect their interests.

BPR Rwanda Managing Director George Odhiambo said East Africa that the lenders opted for receivership after other efforts to recover their money from the owners of the building failed.

The Kigali Business Center (KBC) is one of the newest premier shopping complexes to be added to the Kigali skyline. It is located at a convenient intersection in the city with other high-end amenities such as Kigali Heights, Kigali Convention Center (KCC), and Radisson Blu Hotel.

The shopping complex houses furniture and clothing stores, entertainment venues, and BPR and Equity bank branches.

But despite it being nearly fully occupied, the owners were unable to repay the $16 million loan owed to the two lenders, prompting the banks to initiate the receivership process.


“We are not excluding KBC as indicated. BPR and the bank whose project we co-financed have just filed a request for receivership in accordance with the law; this is where the problem lies,” Mr Odhiambo said.

“There were several efforts from the side of the bank, like giving a moratorium – a grace period, restructuring the loan, but nothing changed,” he added.

RDB Arbitration

He said the two banks engaged RDB, including asking the board to speak to the borrower to meet its obligations and arbitrate between the lenders and the borrower.

“The property is occupied and the tenants have paid rent, including BPR, which is one of the tenants, but the loan is not paid. The client has not only defaulted on his commitments to the banks, but also towards RDB,” he said.

Mr. Odhiambo noted that the ball is now in RDB’s hands to approve the receivership application and appoint a receiver manager.

Property of KBC

The Kigali business center is owned by Charles Mporanyi, one of Rwanda’s accomplished businessmen. He built the complex after selling his insurance company Soras, Rwanda’s second oldest insurer, to South African giant Sanlam. It was to be his swan song after a long career in Rwandan business.

The developments left many wondering what could have gone wrong for the businessman as there were hardly any signs of distress at KBC given its high occupancy rate except shocks of the Covid-19 pandemic.

East Africa Mr Mporanyi could not get a comment, but an inside source said the problems the property is currently facing are rooted in governance issues due to interference by the businessman’s children.

“The property has a high occupancy rate, north of 80% – higher than most players in the market. There is a bit of default from a few tenants but that is not alarming,” said added the source.

Mr Odhiambo said KBC is currently valued at around $23 million, adding that lenders are not committed to foreclosure.

“Banks don’t like this process. If the customer starts paying, this will all stop,” he said.

Commercial real estate is one of the sectors with high non-performing loans in Rwanda. According to central bank data, NPLs for the sector between December 2020 and March 2021 fell from 7.5% to 16.7%.

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