Small businesses tipped on access to funding ahead of continental SME and banking forum in Kigali

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Farmers stand next to an irrigation water pump. Many SMEs don't access loans to expand their ventures. / File

Most small-and-medium enterprises (SMEs) fail to get credit from financial institutions because of poorly designed or incomplete business proposals and lack of capacity to manage loans.

According to Jacqueline Mugwaneza, the Rwanda Bankers Association executive secretary, banks also delay or turndown loan applications from SMEs because operators lack skills on how to prepare and implement their projects successfully and in a sustainable manner.

Mugwaneza was speaking to Business Times ahead of the forthcoming continental 4th SME and Banking Forum conference in Kigali on Monday.

The forum will discuss ways of addressing the challenges that SMEs in Africa are facing in seeking funding and running their enterprises successfully.

Start-up operators will also get an opportunity to acquire skills as areas that have a direct impact on their commercial success and survival, AfricSearch, which is organising the event, said in a statement.

The three-day forum is slated for Monday November 13-15 at Kigali Convention Centre. According to the organisers, the forum has become a pivotal stepping-stone for many SMEs in Africa.

Mugwaneza said banks and other funding institutions from across Africa will use the forum as a platform to share experiences and knowledge in order to find means to ease access to funding and improve their performances.

She added that SMEs are the foundation of an economy and drive growth in any country.

“Therefore, the forum should work as an avenue to strengthen the partnership between SME borrowers and banks to support this role,” Mugwaneza said.

“One in five SMEs who have attended the forum have received funding as a result of the connections they have made. Compare this result to the struggle SME’s face using traditional methods, and you will understand why our partners are true SME champions,” said Didier Acouetey, the president and founder of the AfricSearch Group, in the statement.

The forum will bring together different financial institutions, business leaders and sector experts from across the continent.

Sylviane Fontaine, the managing director of Foundation Benianh International, said the forum will have “rich and relevant” programme, as well as top speakers and experts in SME funding and development.

Expectations

Jean Baptiste Hategekimana, the chairman of Rwanda Youth and Agribusiness Forum, said the forum should find solutions for the challenges faced by startups like lack of access to finance. He added that there is need for increased collaboration between financial institutions and SME sector players.

“For instance, agribusiness is growing at a high rate currently, with more start-ups joining the sector, but is hard for them to get the funds to expand or sustain the projects,” Hategekimana said. Therefore, we expect the conference to come up with the solutions. We expect the forum to benefit us, he added.

More about the forum

The forum, a result-orientated event that seeks to deliver real solutions for SMEs in Africa, is organised in partnership with IFC, Afreximbank, OCP, Bloomsfield Investment and other champions of SME financing.

Fatma Wane, SMEs and value chains solution lead for West and Central Africa at SFI, said the forum attracts start-ups that have bankable and scalable ideas but lack enough financial support to implement or expand them.

The annual forum focuses on transferring tangible skills through high level master classes led by experts as well as introducing business owners to SME-leaning financiers.

It typically attracts 300 high-growth SMEs, 100 financiers and over 50 experts in SME development, according to the statement from organisers.