The City of Kigali has set up a special fund, Girubucuruzi, aimed at helping city residents with good business projects access low interest loans to start or grow their businesses.
This is a great idea – another front in the fight against poverty as the country strives to attain middle-income status as enshrined in Vision 2020.
Modeled along the lines of the hugely successful Girinka – the national programme that aims at improving nutrition and boost household income by providing a cow to each rural poor family - Girubucurizi too has potential to lift many urban poor out of poverty.
One of the biggest challenges small businesses face is access to credit because they cannot meet the requirements for securing loans from commercial banks such as collateral and good cash flow, without mentioning the prohibitive interest rates.
With Girubucurizi, not only will deserving borrowers access loans at the lowest possible interest rate of five per cent, wholesalers and manufactures are also being encouraged to supply goods on credit to small traders with proven record of honesty.
For example, a retailer in Kacyiru with no money to buy 50 crates of soda to satisfy demand in his or her locality can be linked with a wholesaler or manufacturer who can supply the soda and get paid after the product has been consumed.
This indeed has been the secret behind the success of the Indian community in the pharmaceutical industry where retailers come to Africa with just money enough to rent premises. They are then supplied with drugs worth millions of dollars which they sell, pocket the profit and remit to the suppliers back home the worth of factory price.
Girubucuruzi should therefore not remain a Kigali project, but should be modified and replicated in all urban areas in the country, the same way Girinka has been spread to all rural areas.
It is quite clear that with growing urbanisation, the Rwandan population will be structured in two ways: The urban traders and the rural farmers with Girubucurizi and Girinka respectively as the most plausible weapons in the fight against poverty.