At least Rwf8 billion has been disbursed, as working capital, to some businesses that were affected by the coronavirus pandemic as the government moves to boost business activity and accelerate economic recovery. The money is part of the Rwf100 billion economic recovery fund that aims at supporting local businesses that are hardest hit by the Covid-19 pandemic, Soraya Hakuziyaremye, the Minister for Trade and Industry, told the media on Wednesday, December 16. The fund was in two portions; Hotel Refinancing which was to enable the restructuring of loans held by hotels, and Working Capital for businesses most affected by the pandemic to keep them operational and avoid employee lay-offs. With the recent review of the conditions, Hakuziyaremye said she expects increased uptake of the fund. The decision to review conditions came after it emerged that there was relatively low uptake of the fund especially for the working capital. “In these times of the pandemic where businesses have, and still encounter losses we encourage them to apply for the fund especially now that the government has reviewed conditions for applicants,” she said. For instance, she said, initially, businesses applying for the fund were requested to have registered losses between the January and May. “But that has changed. No business is limited. As long as they counted losses in this year.” At the sidelines of the press conference, Hakuziyaremye explained that the uptake of this provision remains relatively small amongst Small Medium Enterprises (SMEs). However, she explained, there’s strong appetite for the funds from large businesses. For the working facility, banks are lending to clients at around 8 per cent interest rate with a grace period of up to 12 months and a repayment period of 5 years. The Central Bank is in turn lending to local banks at 3 per cent interest rate. Applications are made through respective banks which are conducting a case by case debt sustainability assessment. Banks then submit the applications to the Central Bank for review leading up to the final approval. On approval, banks disburse the funds to the borrower’s account then submit proof of the disbursement to the regulator who then credits the bank’s account with the disbursed amounts.
