How will city avoid fraudulent access to street vendor funding?

The Local Administrative Entities Development Agency (LODA) and City of Kigali officials confirmed the establishment of a team to carefully select former street vendors who will receive financial assistance in order to avoid fraudulent access to low-interest loans and free trade stands in the markets designated for the vendors. ALSO READ: Former street vendors to get low-interest financing opportunity So far, 4,158 former street vendors in 30 mini-markets in Kigali are set to receive loans at a two per cent interest rate per year. The vendors will be given trade stands in the markets free of charge and are exempt from hygiene and sanitation fees, as well as trading license taxes, for one year. ALSO READ: How effective has the ban on hawkers been? The money will be provided under the VUP programme. Vision Umurenge Programme (VUP)—which was introduced in 2008—is an integrated local development programme to accelerate poverty eradication, rural growth, and social protection. One of the programme’s products is a microcredit scheme—a VUP financial service—where small loans at low-interest rates are extended to individuals or groups of low-income earners. With the government’s plan to provide trade stands in the markets, and low-interest loans, there are claims that some people fraudulently benefitted from the Nyabugogo street vendors market, and other such projects, yet they were not street vendors. Claudine Nyinawagaga, the LODA Director General, said a team is cautiously selecting the project’s recipients so as to prevent fraudulent access to the financial aid and stands in the markets. “We are working with the City of Kigali to create more markets for the street vendors. However, these markets should only benefit those who were working as street vendors. We strongly warn individuals who are inviting their relatives and friends from different parts to come and act as street vendors so that they benefit from the support,” she said, indicating that she is aware of deceitful people who could attempt to hijack the project. She said that carefully chosen representatives of former street vendors in various parts of the city will collaborate with a team of local leaders to thwart fraud. “The known former street vendors will help share information about people seeking fraudulent access to the support so that we eliminate them,” she noted. She said that the financial support to the vendors starts from Rwf100,000 in addition to trade stands and exemption from taxes. ALSO READ: How can market vendors recover from Covid-19 shocks? “If a street vendor was using Rwf10,000 as capital, we realised that we can start with giving them Rwf100,000 capital.” She said the loan might increase to even Rwf150, 000 and Rwf200, 000 as the vendors keep performing well and paying two per cent interest. Some vendors abandon markets with defaulted loans Martine Urujeni, the Vice Mayor in charge of Socio-Economic Affairs in the City of Kigali, added that an assessment will be carried out in all markets set up for the former street vendors to find out if they are still using them or have abandoned them. Some markets were abandoned as vendors say they are not located at strategic locations where they can get buyers. However, city officials said many vendors prefer to hawk while others help bigger traders sell their products on the streets and get commission fees after selling. “We realised that some vendors misused the loans and vanished. They should pay back the money so that we can use it to support others in need. Those who abandoned the markets must be replaced given that there are others in need of these markets.” “We are also warning against fraudulent access to the support. We are working with local leaders and known street vendors to register their colleagues as they know each other,” she said. City officials warned that a street vendor or buyer will pay Rwf10,000 as a fine whenever caught red-handed selling or buying items on the street.

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How will city avoid fraudulent access to street vendor funding?