As part of efforts to curb unemployment among the youth especially university and high school graduates, Business Development Fund (BDF) is seeking viable agribusiness projects for financing all districts across the country.
According to Diana Kareba, the Investment and Portfolio Manager at BDF, during the current fiscal year, at least two agribusiness projects will be selected from each district bringing the target projects to 60 across the country.
The deadline for submission of application is 19th October.
She said the agribusiness financing scheme to youth, which began in 2016/17 fiscal year, is in line with National Employment Programme and has been growing in terms of projects supported each year.
BDF assists Small and Medium Enterprises to access finance, especially those who lack sufficient collateral when seeking credit. BDF provides credit guarantees as well as Quasi-Equity support to start-up among many others.
The scheme for youth in agribusiness, which is part of Quasi-Equity support, brings together partners such as the Ministry of Agriculture and Animal Resources, Rwanda Youth in Agribusiness Forum, Rwanda Cooperative Agency, women and youth councils and district authorities among others.
The eligibility criteria seeks to finance agribusiness projects owned by youth who are either secondary or university graduates (A1 and A0) and graduated at least two years ago.
"The projects owners need not to have studied agriculture related courses in school or university,” Kareba said.
Among the categories of projects that are eligible for financing include aquaculture projects, modernized livestock and agriculture farming, horticulture and agro-processing projects.
"This is the third time since we started agribusiness financing scheme targeting the youth. We look for projects of youth be it in firms, cooperatives or individual initiatives. The projects must be in primary production, agro-processing as well as agricultural exports. However primary production must also be using technology such as green house, irrigation and others which help to increase productivity,” said Kareba.
Other criteria include having a sense of innovation, having Rwandan citizenship and at least 50 per cent of employees should be graduates as the projects ought to have job creation potential.
She said the projects should also be start-up projects with not less than one year of existence and not older than 3 years.
She said applicants are also expected to proof that their respective companies and cooperatives are registered and have necessary paper work.
The package
Under the Agribusiness Financing Scheme, BDF supports agribusiness projects in production and agro-processing where the fund co-invests with the project owner.
Under the agreement, the package for viable projects includes of project owner’s contribution of 10 per cent of the amounted requested from BDF, a grant of 30 per cent and BDF’s shares of 60 per cent.
The ceiling of the loan amount under the scheme is Rwf10 million given at an interest of 12 per cent per annum
"It means that of the whole Rwf10 million package, the project owner has to contribute their Rwf1 million (10 per cent), they receive a grant of Rwf3 million (30 per cent) and BDF invests Rwf6 million shares (60 per cent) paid back to us at an interest rate of 12 per cent.
"This shows that on paying back the loan, the project owner remains with Rwf3 million grant grow their company. We accompany them during the whole process for business development advisory services until they pay back the loan to avoid BDF shares to face risks, train them in financial management issues, marketing strategy, staff management,” she explained.
Kareba said that the beneficiaries can repay the loan within five years with grace period of 6 months but also have provisions for those who wish to pay within three years.
"We are encouraging more youth to join agribusiness as it is a viable business. They should cease having a poor mind-set that agriculture is of less value,” she said calling for increased involvement of the youth.