Bank of Kigali Plc. (BK) is calling upon clients - who have won tenders to deliver goods and services or carry out contractual works- to apply for loans that will help them get enough needed capital to deliver.

The loan product is based on Local Purchase Orders (LPOs) or contracts for service provision.

The facility particularly targets entrepreneurs who are contracted to provide services and they are paid after.

Emmanuel Bahizi, the Corporate Banking Manager at Bank of Kigali said that for clients to acquire this loan, they must show a copy of contract or purchase order to provide a service from a reputable institution, its execution period, list of items to purchase as well as a collateral.

"The collateral is necessary because if you have not been working with the bank, we need to ensure your financial status. There are others who have been working with the bank, but because the contract for service provision is very big, we request the collateral. We not only provide loans but also provide advisory services to our customers,” noted Bahizi.

He said that clients are also required to submit tax clearance showing that their business doesn’t have arrears in taxes for government. "We also check how you work with other banks to ensure clean record,” he said.

Contracts are different in terms of size, but he said Bank of Kigali can provide up to Rwf40 billion loan. "Even if the order requires much more than that, we work with other banks to finance the project as the lead bank,” Bahizi said.

He said that every Rwandan and foreigner living in Rwanda -who have won tenders or contracts for service supervision and purchase orders they want to fulfill- can apply for the LPO/Contract loan.

Once a business person has won a tender and is need of financing, they can open a bank account in BK, write a loan application letter specifying the needed amount of money, the intended use of the loan and timeframe for paying back the loan.

The process to assess the application, he explained, takes between one to two weeks. The interest rate varies between 16 % and 18 % depending on the client’s risk assessment,” said Bahizi.

"It is in the interest of the bank when the business of its clients is profitable. When we realize that you may fall into losses, we advise you on who how well you can execute your contract, he said.

"This is a product we developed for our customers in our commitment financially transform their lives while playing our part in national development,” Bahizi added.