Government has announced will guarantee Small and Medium Enterprises (SMEs) to access funding from commercial banks.
Government is convinced it is only through accessing financing that the private sector will grow to takeover the economy.
The move comes at a time most commercial banks in the country shun funding SME that form 90 per cent of businesses in Rwanda. The financial lending institutions say these SMEs lack collateral and are run informally to be trusted with people’s deposits.
Now government will act as a guarantor for SMEs to access loans from financial institutions in the country.
"With Frw800 million in Rwanda Development Bank, SMEs can borrow upto Frw2.4 billion. But that fund will grow to Frw10 billion soon," James Musoni, the finance and economic planning minister said on phone.
He said the private sector will start benefiting from this fund next month.
He also announced that government plans to introduce another Frw5 billion—credit line for micro finance institutions in order to fund economic activities in villages.
In a separate incidence, Musoni recently regretted to note that entrepreneurial courses meant to develop business skills necessary for creating a successful economy are not offered in institutions of higher learning.
He was recently addressing Rwanda education roundtable on the role of universities in building a culture of civic responsibility, interdependence and prosperity at Novotel Hotel, Kigali when he noted.
The minister said government is trying to empower the education sector to play a central role in developing active and critically thinking citizens.
Senior presidential advisor Dr Ephraim Kabaija notes that the current investment in the education sector is not enough to make Rwandans world class competitors.
"Only 10 per cent of graduates are supposed to be employed by the public sector," he said. Adding that since the private sector is still weak, the majority are employed by the public sector which does not accommodate everyone.
Kabaija described the training in universities as typical textbook training which to him, leads to incompetent staff.