Congo’s Largest Bank Expects Mining Loan Portfolio to Surpass $1 Billion
Rawbank Sarl, based in Kinhsasa, predicts that its lending to the Democratic Republic of Congo’s mining industry will surpass $1 billion this year, with an increase of over 20%, fueled by growing demand and strong prices for the country’s strategic minerals.
The bank’s mining loan portfolio increased to $820 million in 2022, nearly doubling its credit offerings from the previous year, according to Etienne Mabunda, commercial director at Rawbank Sarl. The loans include credit to mining companies, subcontractors, and salaried workers at large firms.
High mineral prices and a recent law mandating more Congolese nationals to work as subcontractors in the industry resulted in significant investments in Congo’s copper, cobalt, gold, tantalum, tin, and tungsten industries last year, Mabunda said.
The shift towards greener energy has also spurred demand for minerals used in the production of EVs, solar panels, and turbines.
Congo is a leading producer of cobalt, a key component in batteries, and one of the world’s largest copper producers. The government is exploring the development of chrome, nickel, and lithium deposits, according to Congolese President Felix Tshisekedi.
Companies such as Ivanhoe Mines Ltd., CMOC Group Ltd., and Eurasian Resources Group Sarl are expanding their operations in Congo, while BHP Group and Anglo American Plc have considered entering the market, despite its risky reputation due to rampant corruption.
“Central Africa has great potential in terms of its ability to supply the minerals and metals we require,” said Anglo American CEO Duncan Wanblad in a recent interview. “If the policies are favorable, there’s no reason why a company like ours can’t consider this region.”
Rawbank is managing the risk by maintaining a capital that exceeds the minimum required by the central bank of Congo, according to Etienne Mabunda, Commercial Director of the Kinshasa-based lender, it has been increasing its capital through retained earnings and shareholder injections to ensure compliance with prudential ratios, Mabunda said. The bank is primarily owned by members of the Rawji family in Congo.
The lender primarily relies on client deposits and financing from multilateral banks for funding, Mabunda stated. Rawbank is competing with the Congo unit of Kenya’s Equity Group Holdings to become the largest lender in the country, after the latter merged with Banque Commerciale du Congo.
In 2023, Rawbank plans to raise its single obligor limit to offer more support to Congo’s major miners. The bank will also broaden its offerings to new Congolese-owned companies involved in mining services to provide equal opportunities for growth in the sector and the DRC economy, according to Mabunda.
