BK Foundation, GIZ to offer interest-free loans to MSMEs in circular economy

BK Foundation, in partnership with GIZ Rwanda, has launched the first edition of the Urumuri Initiative to support entrepreneurs in the circular economy with comprehensive business training, technical assistance to boost their operations, as well as interest-free loans ranging from Rwf 5 million to Rwf 30 million. Circular economy models are systems designed to minimize waste and maximize the use of available resources by focusing on reuse, recycling, and regeneration. This model aims to close the loop of product life cycles by promoting the repair, refurbishing, remanufacturing, and recycling of materials and products. A total of 135 entrepreneurs will benefit from the business development programme, with 30 to 40 selected businesses receiving interest-free loans of up to Rwf 30 million to implement their climate solutions. The loans will be repaid within three years. Urumuri Initiative , themed Empowering Green MSMEs in Climate Action & Circular Economy, supports growth-stage Micro, Small, and Medium Enterprises (MSMEs) with innovative, climate-focused solutions and circular economy models. The Urumuri Initiative, designed to finance circular economy models, presents a unique opportunity for green entrepreneurs to drive change in Rwanda while receiving both technical and financial support. It reflects the shared commitment of GIZ Rwanda and the BK Foundation to promote inclusive green growth, build resilience, and accelerate climate action and the circular economy in Rwanda. “It is a true commitment that we all share towards the sustainability and prosperous future of our country. Climate change is a reality that affects us daily. As a foundation, we have found both challenges and opportunities in it. As we consume, produce, and manage our resources, we need to think of a more resilient way to create a sustainable economy,” said Ingrid Karangwayire, Executive Secretary of BK Foundation. Founded in 2023, the BK Foundation is the philanthropic arm of the Bank of Kigali Group, Rwanda’s leading financial institution. Karangwayire emphasized that by prioritizing climate action and circular economy in supporting MSMEs, the programme would drive significant economic impact. “The Urumuri Initiative is a catalytic transformation. We are creating an enabling environment for MSMEs to become more bankable. We will provide training, business development support, mentorship, and interest-free loans to MSMEs integrating climate practices into their work,” she added. Eligibility Criteria The selection process aims to identify and support MSMEs that align with the objectives of the Urumuri Green MSMEs Initiative. The specific eligibility criteria include business classification, where applicants must meet the MSME classification according to Rwandan legislation, ensuring they fall within the relevant economic framework. Businesses must provide documentation proving they are legally registered with the relevant Rwandan authorities, ensuring compliance with all legal and regulatory frameworks. Applicants must demonstrate that their business has been operational for at least six months through documents such as business registration papers, tax identification numbers, or evidence of revenue generation. The business idea must demonstrate scalability and have an economic, climate, environmental, and social impact. The business must operate within sectors that are relevant to climate action or circular economy solutions, such as agriculture, energy, transport, forestry, manufacturing, and tourism. Service sector businesses, such as IT or finance, will also be considered if they address climate change or circular economy goals. The business must contribute positively to climate change mitigation, adaptation, or environmental sustainability in alignment with Rwanda’s policies. Entrepreneurs can apply through the official application portal: https://bkfoundation.rw/urumuriprogram Special consideration will be given to businesses that are youth-led, especially those owned by individuals aged 18-35, women-led projects empowering women in leadership roles, as well as businesses owned by individuals with disabilities, to promote diversity and inclusion. Greenhouse Gas Emissions Down by 38% Maik Schwarz, GIZ Rwanda Country Director, noted that Rwanda has set an ambitious climate goal to cut greenhouse gas emissions by 38% by 2030, and achieving this target requires joint efforts. “It takes all of us government, academia, civil society, and, most importantly, the private sector. MSMEs are key players in climate solutions and circular economy practices. GIZ Rwanda is working with the Ministry of Environment and BK Foundation to unlock the private sector’s potential in tackling climate change and promoting circular business models,” he said. Capacity building, financial literacy, and business coaching are essential for MSMEs, Schwarz added, citing the Urumuri Initiative as a sustainable financing model. Beatrice Cyiza, the Permanent Secretary in the Ministry of Environment, stated that finance from partners and financial institutions is crucial, given that Rwanda needs $11 billion to implement its climate action plans, known as Nationally Determined Contributions (NDCs) by 2030. “We still have a gap of around $6 billion that we need to mobilize to implement the climate action plans. We need companies, we need banks, so that we can work together to reach our targets. The circular economy is an opportunity for businesses. But we need to develop viable businesses—businesses that are climate-resilient and do not emit carbon emissions. In Vision 2050, we want to become a climate-resilient and low-carbon country,” she said

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BK Foundation, GIZ to offer interest-free loans to MSMEs in circular economy