Rwanda’s Small and Medium Enterprises (SMEs) are among the 500 SMEs across Africa that will benefit from Grofin’s $160 million (Rwf90 billion) fund in form of equity and loans.
The venture capital fund has announced that SMEs from seven African countries including Rwanda, Ghana, Nigeria, Kenya, South Africa, Tanzania and Uganda will benefit from the fund.
Eric Rwigaba, Country Manager Grofin Rwanda, the scheme will be officially launched in Rwanda in July.
In an interview with Business Times, Rwigamba said the money will be disbursed in form of loans, equity or both to SME with good projects. In case of debt financing, he said the interest rates will vary depending on the risk of the business.
“No country will benefit more than the other, it will depend on how aggressive each head office will be in order to get enough funds,” He added.
The company finances all legitimate businesses apart from primary agricultural related business. The fund comes at a time commercial banks’ interest rates have increased at above 18 percent per annum as a result of diminishing liquidity.
“Access to finance and the use of collateral in lending are the major obstacles to SME growth in Africa. So these funds come in the right time to back up to the SMEs,” Rwigamba said.