The government is set to establish an investment fund to foster entrepreneurship among the youth over the next five years.
The Youth Investment Facility is an initiative embedded in the Five-Year Youth Sector Strategic Plan (2024–2029), developed by the Ministry of Youth and Arts.
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The fund seeks to design youth-friendly products, including low-interest loans, reduced collateral requirements, venture capital, and microfinance schemes, among other types of essential support.
The New Times looks at key things to know about the proposed fund.
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Facility to operate as a ‘revolving fund’
Solange Tetero, Director General of Youth Empowerment in the Ministry of Youth and Arts, told The New Times that the Youth Investment Facility (YIF) will operate as a revolving fund.
A revolving fund is a fund in which money is used to finance ongoing activities or projects and is continuously replenished as funds are repaid from those projects.
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It is not a one-time fund; instead, it operates in a cycle whereby funds are disbursed, recovered, and then reused for the same or similar purposes.
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Single-digit interest rate
The interest rate to be charged by the facility will be less than 10 per cent.
"It will be a revolving fund, and the youth will repay it with an interest rate of eight per cent. You can understand that it will continue to circulate and reach many people,” Tetero explained.
3. When will the fund start?
"The Ministry of Youth and Arts is finalising the necessary steps to launch the facility, which we hope will be ready by the second quarter of this fiscal year,” she said. This means the fund should be up and running before the end of 2025.
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4. BDF involved
The ministry plans to partner with the Business Development Fund (BDF) and commercial banks to expand funding for established youth businesses. The BDF supports youth- and women-led businesses by ensuring their collateral for bank loans.
Tetero said they are finalising the necessary steps with the BDF to launch the Youth Investment Facility.
5. Who will finance the fund?
The official said financing for the youth investment fund will come from the government and its partners, such as the European Union, the United Nations Development Programme, and the United Nations Population Fund.
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6. How much will be invested in the fund?
"We are still mobilising resources. I cannot say at this point the exact amount we will start with,” Tetero explained.
Meanwhile, the Five-Year Youth Sector Strategic Plan (2024–2029), which will create the facility, requires Rwf49 billion for implementation.
A major component of the plan—youth economic opportunities and entrepreneurship development—will require Rwf12.7 billion, with Rwf2-3 billion expected each year.
7. How many youth will be supported?
Tetero added: "We want to design it in a way that will benefit the largest possible number of young people.”
The facility is one of the interventions intended to help create 250,000 productive and decent jobs annually until 2029 as part of the National Strategy for Transformation (NST2).
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John Bosco Kalisa, a member of the Council of Small and Medium Enterprises of Rwanda, said affordable finance was a major barrier for SMEs and young entrepreneurs in Rwanda, adding that high interest rates and strict collateral requirements limit the ability of many to secure capital for their businesses.
"Micro, small, and medium enterprises make up 97 per cent of Rwandan companies, yet only 15 per cent have access to finance. We cannot sustain or grow our economy with such low financial inclusion,” said Kalisa
According to the 2020 FinScope survey, only 16 per cent of youth entrepreneurs in Rwanda had access to loans from formal institutions in the previous year.
This indicates a big gap in financial inclusion, with most youth relying on informal sources of capital.
The five-year youth plan aims to double this figure, targeting 32 per cent of youth entrepreneurs to access formal credit by 2029.