A national oversight committee has been established to supervise and guide the transition process for integrating the Business Development Fund (BDF) into the Development Bank of Rwanda (BRD), the Ministry of Finance and Economic Planning announced in a statement to The New Times. The committee includes representatives from the National Bank of Rwanda (BNR), the Ministry of Finance and Economic Planning, the Ministry of Trade and Industry, the Business Development Fund (BDF), and the Development Bank of Rwanda (BRD), among others. “A committee chaired by BRD is overseeing the due diligence and integration processes and is preparing a detailed transaction plan,” the statement reads in part. ALSO: BDF integrated into BRD as govt targets efficient business financing According to the ministry, the core mandate of the BDF – supporting access to finance – will remain after the integration. However, delivery is expected to improve through greater collaboration with SACCOs and the private sector. The Ministry of Finance explained that the integration primarily aims to improve efficiency and eliminate overlaps, as BRD, which already owns 45 percent of BDF, is now launching its own guarantee fund. “It is important to highlight that BRD held around 45 percent of BDF’s shareholding. In parallel, with support from KfW and the World Bank, BRD has initiated the creation of its own guarantee fund. BRD currently accounts for a significant portion of BDF’s total guarantee portfolio,” the ministry noted. The ministry added that BRD’s new strategic plan has enhanced its operational efficiency and strengthened its client outreach by leveraging SACCOs and other financial institutions. ALSO READ: Minister Sebahizi defends BDF’s role despite calls to scrap it It remains unclear whether BDF will retain its current mandate under the integration, whether its management team will be dissolved, or whether the institution itself will be disbanded as BRD shifts focus to its new guarantee fund. However, the ministry clarified in its statement that “all existing agreements and guarantees will remain valid” and that the transition team is tasked with ensuring business continuity, minimizing any disruption for clients and partners. Kampeta Sayinzoga, BRD’s CEO, said it is too early for BRD to provide detailed updates on the ongoing integration process, adding that more clarity is expected in about two months. In the meantime, BDF remains operational, with its current management and staff still in place. ALSO READ: BDF adopts new model to increase access to finance Greater efficiency expected The Ministry of Finance stated that the integration of BDF into BRD is expected to lead to greater efficiency for those seeking guarantees, while also streamlining public investment. Key bottlenecks to be addressed include slow operations, inefficient resource use, limited adoption of digital tools, restricted SACCO reach, and rigid procedures. “The integration will ensure operational efficiency, resource optimization, agility, digitalization, and the development and empowerment of SACCOs and financial institutions,” the ministry noted. According to the statement, BDF’s scope has gradually evolved – from primarily offering credit guarantees to de-risk direct lending – to also providing direct loans, such as leasing and start-up financing. This evolution created overlaps with the very financial institutions BDF was established to support, leading to duplication of roles. BRD now plans to centralize these services and provide more effective support to financial institutions, including SACCOs and banks. ALSO READ: BDF CEO says it created 330,000 jobs as MPs push for loan recovery What beneficiaries say Entrepreneurs have identified long loan-processing times as a key bottleneck that should be addressed during the integration of BDF into BRD. Currently, BDF guarantees 50 percent of a loan, and up to 75 percent for special categories such as women, youth, genocide survivors, and people with disabilities. However, loan processing often takes longer than expected. Dieudonné Niyodushima, Co-Founder of Exodus Farm Ltd—an agribusiness firm that has benefited from BDF financing—shared his experience with the lengthy application process, attributing the delays to fragmented communication and a lack of clear, upfront guidance. ALSO READ: Lawmakers want BDF’s agribusiness loans extended to non-degree holders He said his loan process took two years. “What mostly delays the loan process at BDF is that requirements are not provided all at once. You apply, and they ask for a business plan. Once that is submitted, they request proforma invoices. Then a bank statement. After that, a valuation report of the collateral,” he explained. “Next, you are asked for a board resolution with shareholders, which then has to be notarised, among many other things. If they could provide a comprehensive checklist at the beginning, it would really help,” he added. He emphasised that if BDF provided a complete list of required documents upfront, applicants could prepare everything in one go, significantly reducing processing time. “For example, for a programme like Leasing, they could state clearly that it targets youth and women within a certain age range, and that the required documents are A, B, C, D... That way, applicants would know exactly what to prepare and could submit it all together, making the process much faster,” he suggested. ALSO READ: BDF pushes for mindset shift in SACCOS to boost financial inclusion Clementine Mukandayisenga, a woman entrepreneur who produces wine and juice from sugarcane and passion fruit, has called on the government to fully guarantee loans provided by BDF. “We want BDF to change the way it operates. Some entrepreneurs have been discouraged. I tried to apply for a loan but gave up because it took too long. When the application process takes six to eight months, it becomes discouraging,” she said. BDF had previously assured entrepreneurs that they would not need to present collateral since the loans were guaranteed. However, Mukandayisenga noted that equipment purchased through the loans was later treated as collateral. “It was a challenge because that equipment would eventually be auctioned, in addition to other properties being sold,” she explained. ‘Ensure fair distribution of loans’ MP Theogene Munyangeyo, Chairperson of the Parliamentary Committee on Economy and Trade, said that once integrated, BDF’s services must be fairly distributed to enhance access to financing across the entire country. “We observed that youth and women in some regions were not accessing support. BRD should ensure skills and support reach remote areas and that many people across the country have access,” he said. “Previously, loans and guarantees were concentrated in certain areas, or larger loans were given to a few individuals, contrary to BDF’s original mandate,” he added. The Auditor General’s report revealed that BDF had, in some cases, provided guarantees to large enterprises not aligned with its core mandate, supporting SMEs without adequate collateral. The National SME Development Policy defines SMEs as enterprises not exceeding Rwf75 million in net capital investments, Rwf50 million in annual turnover, and 100 employees. However, BDF’s policy allowed for projects with capital investment ceilings of up to Rwf500 million, contradicting the national policy. As a result, the report found that BDF had provided credit guarantees worth more than Rwf25.1 billion to finance 217 large enterprises, despite its original SME-focused policy. This accounted for 51 per cent of total credit guarantees – over Rwf49.2 billion – provided between 2011 and August 2019. Munyangeyo also called for greater order in the system, noting past instances of scammers impersonating BDF staff to solicit money from project owners seeking funding.
