The National Bank of Rwanda (BNR) has announced that Rwanda’s financial sector remains stable and resilient, despite facing challenges that could impact the economy—such as rising international market prices, persistent instability in the Middle East, and inflation.
This assessment was made by the Financial Stability Committee after reviewing the sector’s status as of the end of June 2026.
The committee’s report indicates that the assets of financial institutions reached 17.5 trillion Frw, a 23% increase compared to the same period in 2025. Relative to the Gross Domestic Product (GDP), financial sector assets rose to 68%, up from 66%.
The BNR attributes this growth primarily to deposits held in banks and financial institutions, insurance, investment returns, and pension contributions.
Loans increased by 22%
Loans issued by banks and microfinance institutions also continued to rise. In the first half of 2026, the total reached Frw 7 trillion, a 22% increase compared to the previous year.
Banks held over Frw 6 trillion, while microfinance institutions held nearly Frw 834 billion, marking a 27% increase.
The construction sector continued to lead in loan uptake, with its share rising from 19% to 23%.
There was also a significant rise in loans granted to the agricultural sector. New loans in this sector surged by 177% to reach Frw 57 billion, raising agriculture’s share of total lending from 2% to 5%.
Banks maintain adequate capital
The National Bank of Rwanda (BNR) reported that non-performing loan ratios remained below the 5% threshold. Among banks, the ratio of non-performing loans stood at 3%, while for microfinance institutions, it was 2.3%.
For non-deposit-taking financial institutions—those that exclusively provide loans—this ratio dropped to 3.8%, down from 7.5% in 2025.
Regarding capital, banks maintained an average capital adequacy ratio of 22%, while microfinance institutions stood at 30%; both figures exceed the 15% regulatory threshold.
The BNR also noted that liquidity levels within banks and financial institutions remain adequate, while banking profitability continues to be strong. The return on equity for banks stood at 21% at the end of June 2026.
However, the Committee highlighted the need to continue monitoring the issue where 88% of deposits are short-term. This situation could pose a risk if such short-term funds are used to finance long-term loans.
Overall, the BNR affirmed that Rwanda’s financial sector is robust and resilient to economic shocks, though it emphasized the need to remain vigilant regarding potential emerging risks.