It will now be easy for entrepreneurs who belong to co-operatives to access funding from Development Bank of Rwanda (BRD) after the financial institution pledged to increase lending to organised groups.
Alex Kanyankole, the BRD chief executive officer, said the move aims at supporting such business people acquire credit to undertake large projects.
“It’s not easy for an individual to access a Rwf1b loan since they might not have the required collateral. That’s why we encourage business people to form co-operatives under which they can secure credit to implement their projects on schedule,” he said.
Kanyankole revealed that the bank recently extended about Rwf10b credit to co-operatives, with Inkudamahoro Co-operative in Nyabugogo, Kigali’s budding business suburb, which secured Rwf5.5b to construct a multipurpose business complex. The 4,300-square metre modern complex will be completed by June and will have 600 stalls.
Adarwa Co-operative, in Gacuriro, an association of carpenters formerly based at Gakinjiro in Kigali, also got a Rwf1.1b loan to set up a 167-room commercial building. The complex is expected to house over 480 businesses as it seeks to create viable space for budding entrepreneurs in the city.
Kanyankole said the buildings will house hardware shops, salons, pharmacies and restaurants, among other businesses, most of which are currently operating in unsuitable environments.
He said the projects funded by the bank provide employment opportunities for residents and boost tax collection.
“It will help propel the country towards the attainment of the second phase of the Economic Development and Poverty Reduction Strategy growth targets,” Kanyankole noted.
Under the credit scheme, the beneficiary co-operatives repay the loans within a period of over seven years, depending on the nature of the project.
Justin Gashaija, the president of Adarwa Co-operative, said they were earning peanuts as individual carpenters.
“However, since we formed the co-operative, we have been able to increase our earnings, thanks to varied capabilities and skills of group members, which have enabled us to undertake big projects, including the recent construction of the Gisozi Road that leads to our work area,” he said.
He said the co-operative has 157 members and serves about 3,000 clients a day.