The World Bank Group on Tuesday 15 approved $150 million to support Rwanda increase access to finance with an aim to support recovery of businesses affected by the Covid-19 pandemic. The funds include $25 million in grant financing. The development will see the Access to Finance for Recovery and Resilience (AFIRR) Project also benefit from an additional $7.5 million grant from the Global Risk Financing Facility, a Multi-donor Trust Fund that will help to enhance access to finance through risk-sharing solutions. The Access to Finance for Recovery and Resilience project is aimed at providing financing targeting affected businesses to facilitate refinancing of existing debt obligations, provide working capital, and support investments for business adaptation. This will be complemented by risk sharing instruments, including a partial credit guarantee scheme and a bridge loan and insurance facility to increase access to finance for underserved segments such as micro, small and medium sized enterprises (MSMEs). In addition, the project will provide targeted technical assistance to firms, participating financial institutions, and government implementing agencies, to address existing constraints for increasing uptake of the Economic Recovery Fund. Rolande Pryce, World Bank Country Manager said that they view the project as an important contribution to the government’s post-COVID Economic Recovery Plan, promoting investment in priority growth sectors, supporting jobs and reinforcing Rwanda’s financial system’s crisis preparedness. “The AFIRR project provides significant resources to help further capitalize the Economic Recovery Fund coupled with enhanced support programs to improve firms’ capacity and remove barriers to access to finance. It provides a suite of instruments that strengthen the existing recovery ecosystem ranging from financial instruments to adjustment mechanisms that include innovative risk mitigation solutions,” she said. Brice Gakombe, the Project Task Team Leader explained that interventions under the project will help businesses to continue to operate and adapt to the post-COVID environment. “They will also provide a lifeline to firms in growth-potential sectors that find it difficult to access financing from financial institutions; this will contribute to preserving jobs and mitigating loss of otherwise productive firms that can help drive economic recovery,” Gakombe said. In addition to providing financing, the AFIRR project will bolster the capacity of key government and private sector stakeholders on the technical aspects of the financing and risk-sharing instruments, as well as disaster risk financing principles. The project is also expected to increase the share of women inclusive enterprises able to access financing under the liquidity and financing facility, and through targeted training to address gender specific constraints for small and medium enterprises as well as improve outreach in underserved segments. This is part of an estimated $500 million in support that the World Bank Group had committed to earlier in the year to be approved and announced in the course of 2021. The committed $500M is expected to go into supporting vaccine procurement and deployment, financial support to Micro and Small and Medium Enterprises, commercializing agriculture and promoting digital inclusion all part of supporting Rwanda’s resilient recovery. The support has been received as the government is set to roll out a second phase of the economic recovery fund raising the availed funds from Rwf100 billion to about Rwf350 billion with a wide scope of target beneficiaries.
