GroFin, a specialist SME finance and development company has increased its funding to the private sector by supporting two entrepreneurs who are providing innovative solutions to the country’s 2006 ban on plastic products.

"We are assisting in creating a clean, environmentally sustainable Rwanda that’s why we have financed Soimex, a local business specializing in the recycling and manufacturing of plastic products,” said Eric Rwigamba the General Manager of GroFin Rwanda.

GroFin is assisting in creating a clean, environmentally sustainable Rwanda following a 2008 investment in Sogem—a paper bag manufacturing company. Both companies provide direct, accessible solutions to substituting and eliminating plastic waste.

"GroFin assisted us in updating the business proposal into an implementable business plan.  This enabled us to start the business and monitor its progress. GroFin’s help in reviewing the projections and related assumptions allowed us to take the right decisions to facilitate growth,” said Fabrice Shema of Sogem.

Shema added that Sogem views GroFin as a true business partner that facilitates them from the inception of their project to future business expansion.

The need for paper bags in Rwanda is high with Sogem catering for only 10 percent. The firm plans to increase production capability through the acquisition of new machines and new employees, thereby increasing the market share and meeting 50 percent of the current demand.

The business is authorized by the government of Rwanda through the Rwandan Environment Management Authority (REMA) to produce a selection of plastic products from recycled plastic waste.

GroFin focuses on the gap that exists between micro-finance, which tends to cater for informal entrepreneurs needing less than $50,000, and commercial banks and private equity, which prefer to finance larger companies that require over $1 million.

Sogem has offered their support and, with the finance provided, Sogem has been able to construct production premises, and purchase the distribution vehicles and equipment necessary to manufacture over than 1 million paper bags per month.

Following the abolition of plastic bags and materials in Rwanda, Rwandese were encouraged by environmental officials to use paper bags as an alternative to plastic when carrying and packaging their goods.

However, with a local manufacturer nonexistent, paper bags had to be imported by neighboring countries, proving costly and inefficient.

Pharmacist Fabrice Shema noticed the need in the market for locally produced paper bags but required the finance and expertise to make it a reality.

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