The housing business in Rwanda has been undergoing high pressure due to DN International failure to pay bank loans, causing some homeowners to be disillusioned; a worry that has vanished following new resolutions assuring better house ownership.
Relevant authorities have intervened and fortunately, the DNI and partners saga arrived to an end after long negotiations of all parties, including the government of Rwanda.
There are various doubts and question on how could such a great business fail in a country like Rwanda that the World Bank classifies at the top in terms of facilitating investors.
This puts it clear that the company in question failed on its own and should not blame it on the country’s Investment Policy which is highly recommendable in the world.
DN International is a real estate developer. It has a very strong tagline which might make people wonder if those words are not just utopia. These are some praising phrases that can be found on the DN International website.
– DN International, the leading housing developer in the East African Region.
– At DN International, we pride ourselves in our commitment to the highest international building standards and efficiency of our services.
– We at DN International are property developers that manage housing mainly from land development and construction to marketing of real estate.
Despite the fact that DN International (Rwanda) started the business proudly in this county, the main information many people are aware of in Rwanda about the company is; that the company has put some nineteen homeowners on the risk of losing their houses.
The property developer, DN International, failed to pay Fina Bank, the financier of the housing project (Hill View estates) located in Kabuga, a town on the periphery of Kigali.
Those houses were purchased from DN International at a cost of Rwf55 to 62 million in 2007.
Following the violation of contract, Fina Bank had put the 19 houses up for public auction. The homeowners then asked Rwandan government to intervene, because some of them had paid the full amount and were seeing no reason to put their houses on the auction.
The auction was suspended and on 22 august 2012 a joyful end was announced.
The Acting Chief Executive Officer of Rwanda Development Board, Claire Akamanzi, announced a new deal had been agreed to put an end to the issue after another developer, B&B Heritage bought out Rwf500 million of the heavily indebted DN International loan from Fina Bank.
“A new investor, B&B Heritage, has agreed to buy out the DN International loan from Fina Bank but in exchange, the investor will be given a piece of land in Kagugu,” Akamanzi disclosed.
Tharcisse Karugarama, the Minister of Justice who has been involved in the negotiations, said, “Of course everybody had to lose something small to at least get something big.”
DNI started its investment in Rwanda as a brilliant company that many people were seeing as a new leader in real estate construction. Businessmen, politicians started to collaborate by buying houses from DN International (Rwanda). But no one had idea of loans this company was accumulating from FINA Bank and Kenya Commercial Bank (KCB).
Some few years ago, DN International, was planning to begin constructing ‘Satellite City’, a project that would have featured a 700-unit housing estate, school, and hospital among other properties. The project was supposed to be built in Gisozi, Gasabo District at an estimated cost of Rwf45bn.
According to Nathan Loyd, the CEO of DN International, the housing estate project was supposed to build 700 units of various categories, a three-star hotel, and a state-of-the-art road and communication network.
DNI had also started a new project called Green Park Villas, and this pristine housing complex was on the market for sale before DNI had issues with its partners, which was perhaps an early sign of its collapse.
The sign of DNI collapse occurred even before. In 2010 Kenya Commercial Bank (KCB) Rwanda issued a notice of intention to auction properties of debt ridden real-estate developer, DN International (DNI), over an estimated Rwf 3 billion loan acquired from FINA BANK.
“We have announced the auction of the Green Park Villas but we are not divulging financial details because there are other negotiations that we are conducting and any further announcement would jeopardize the process,” the Managing Director KCB-Rwanda, Maurice K. Toroitich said.
Until now it is not clear what weakened DNI while all of its houses were bought. Some think its poor management, or that it was too ambitious and neglected the reality on ground ideas or both circumstances may apply.
Currently, DN International’s debts totals to Rwf1.2 billion. Its Chief Executive Officer, Nathan Lloyd, was once taken into custody but he managed to negotiate and was released on bail.