FAGACE opens shop in Kigali

Access to finance by small-and-medium enterprises (SMEs) could be enhanced following the setting up of a local branch the African Guarantee and Economic Cooperation Fund (FAGACE). FAGACE is an international financial institution targeting SMEs financing to improve production and hence economic and social development of its 14 member states, including Rwanda. The firm provides capital and security to the private sector, especially the SME sector, to help reduce poverty through job-creation. Dr Uzziel Ndagijimana, the State Minister for Planning, told The New Times that the opening of Kigali offices by FAGACE “marks a turning point in relations between the Fund and the Rwanda, saying it will boost access to credit and growth. “The institution, therefore, comes at a time when the government is intensifying efforts aimed at promoting inclusive growth, particularly in priority sectors of agriculture, industry, infrastructure and services,” Ndagijimana added. FAGACE director general Henri-Marie Dondra said the Fund has so far financed projects worth Rwf192 billion in the local economy. “Our interventions focus on two financial products - the guarantee line and the projects’ co-financing. These help facilitate development financing institutions with emphasis on SMEs,” Dondra, said. Dondra added that the development finance institutions benefit from products that include financial security, interest subsidisation, and extension of the loan duration, as well as direct financing equity participation and funds management on behalf of third parties. In 2014, Development Bank of Rwanda (BRD) signed a co-operation agreement with FAGACE to facilitate short and medium-term funding to different projects through the provision of financial security - particularly for SMEs in Rwanda. BRD boss Alex Kanyankole said under the partnership the bank received funds for two financial products - the guarantee line and the projects’ co-financing. “Such co-financing arrangement offers investors in medium and long-term investment projects lower interest rates and security to enhance their credit worthiness,” he explained. business@newtimes.co.rw

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FAGACE opens shop in Kigali