A 15-member cooperative in Musanze District is setting business prototype that should be used to redesign the Hanga Umurimo programme currently facing a high loan default rate.

Members of Reba Kure Cooperative pooled Rwf35,000 each and invested in buying and selling of produce. As their name suggests, they chose to focus ahead through savings, not loans.

Today, Reba Kure is an investment group worth millions of francs – having diversified into fabricating machines for small-scale industries. This has created jobs for the 15 founders as well as 20 employees.

By the time they went for Rwf45 million loan, guaranteed by the government under theHanga Umurimo programme, the group was only looking for a push to another level.

Entrepreneurs are not made by bank loans; they are self-made people who can only be supported to grow bigger with the right form of financing.

Therefore, instead of trying to coach people, some of whom have never even managed a small vegetable kiosk, to become multi-million franc investors on borrowed funds, Hanga Umurimo should focus more on supporting existing businesses expand and create jobs.

It makes business sense to guarantee a bank loan for a lodge operator seeking to expand into a three-star hotel and create 100 more jobs than invest in a start-up idea of someone without any  experience and demonstrable commitment to succeed in that business.

The high failure rate of start-up projects is clear testimony that while it is an act of magnanimity to look out for those young and unemployed Rwandans for support to create their own jobs, lack of business acumen is working against them.

So, the correct policy intervention is in using available funds to support those small enterprises with potential to grow and create jobs.