Rwanda Development Bank (BRD) has announced that it will this week officially launch its trade finance facility, an initiative that intends to enhance trade flows in the country.
The service is expected to benefit exporters and importers through documentation to boost international trade, BRD said in a statement.
“Trade Finance is 80 percent documentation. We started up, first of all as a way of making money as a bank but most importantly we wanted to have a full package for our clients,” Jack Kayonga, the Managing Director of BRD said.
Through the service, which is known as BRD Trade Services, the bank will be providing import Letters of Credit (LC) to importers as assurance from a home based bank when dealing with unfamiliar foreign suppliers.
BRD will also be providing import financing solutions such as paying for the suppliers’ documents under letters of credit or import collections, open account or invoice financing.
The new arrangement has also been put in place to support the growth of Small and Medium Enterprises (SMEs) by boosting Rwanda’s exports, especially traditional exports—coffee and tea, among others.
BRD says it will be handling import bill of collection on behalf of importers where it will be informing the supplier to send shipping documents, providing prompt advice to the importer and then pay efficiently.
“It is like a one stop centre for our clients. That is why we keep looking at the different services we can provide,” Kayonga explains.
Through the arrangement, the bank says that it will provide shipping guarantees to facilitate prompt clearance of goods by importers.
Exporters are mainly expected to benefit from the arrangement through export letters of credit, export letters credit confirmation and pre-shipment export financing.
They will also receive post export finance, letters of credit checking and negotiation and bills of collection.
A number of investors including ECOPAK, Enterprise Kubwimana and STEELRWA have already benefited from the service.
In an interview with Business Times, Celestin Kubwimana, the proprietor of the southern province based Kubwimana Enterprise, said that the new service will mainly benefit small and medium businessmen who often find problems accessing funds and supporting documents.
“I wanted Rwf600m to clear my machines which I use to process beans, maize and peas and I got the money very fast. I think we will benefit more from it, especially us in the private sector,” said Kubwimana.
He says that his new machines, which prepare and package food, have now saved prisons from using tonnes of firewood to prepare prisoners food thereby saving the environment.