Rwanda will soon be able to handle cash transactions for regional and international financial service providers following an endorsement to establish Kigali International Financial Center (KIFC).
The cabinet meeting on Tuesday chaired by President Paul Kagame approved this initiative.
The center will basically serve as a home for nationally or internationally significant financial service providers, enabling Rwanda to handle finances for others.
They will include banks, investment managers, hedge-funds or stock exchanges.
Currently Rwanda is on the move to have its financial systems especially the local stock exchange integrated within the regional dynamics. So far the Rwanda stock exchange (RSE) has announced plans to get automated by June 2018 – a step towards standards money handling procedures.
According to Celestin Rwabukumba, an economic analyst and CEO of RSE, the Kigali financial center will add onto what Rwanda has already built in terms of doing business, investment climate, ICT services and increased capital markets operations.
This means that Rwanda will have moved a step ahead towards global financial powers. We have everything it takes to handle money for others, there is security and we won the trust of others.
Besides boosting the GDP, establishment of a financial center means that Rwanda will be able to handle offshore accounts and attract investors to bank their money in Rwanda even when their projects are in other countries.
In this case Rwanda will definitely be able to charge handling services at a percentage which is yet to be made public.
Financial advisor fees vary. Some advisors charge fees in the form of commissions; others in the form of an hourly rate, or percentage of your account value.
There are six most common ways financial advisors charge fees. Percentage of assets that they manage on your behalf, typically anywhere from 1% – 2% per year.
“That percentage of the banked money remains in the country, and this will also come with job creation in the financial sector which graduates hundreds of university students annually,” Rwabukumba said.
The tradition of financial centers has existed for many years since the 11th century and old finance centers such as Amsterdam, London, Paris, New York, and Tokyo have long histories.
Today there is a diverse range of financial centres worldwide. While New York and London often stand out as the leading global financial centres.
However, Rwanda’s minister of finance Claver Gatate has previously tipped Rwanda on walking a similar financial trend especially that of Jersey International Finance Center- one of the world’s leading centres.