The Rwandan business scene has grown over the last 4 years with about 800,000 Rwandan adults owning a business, the recently released 2020 FinScope Survey Report shows.
The survey established that the number of Rwandans who own businesses had grown by 200,000 from 2016.
Going by the survey’s assessment that there are 7.1M adults in the country, it means that 1 among every 9 Rwandan adults owns a business.
Though 53 per cent of the businesses are not formally registered, the report’s authors pointed out that the growth in business owners and businesses may indicate the attention given to developing the micro, small and medium business (MSMEs).
The growth of businesses and enterprise is key as small business are key contributors to job creation, value chain development as well as economic growth.
“It is widely acknowledged that MSMEs are significant contributors to job creation, development, and economic growth. Given the crucial role of MSMEs in the national economy, it is in the interest to harness and optimise on this potential by putting into place strategies to mobilise and enable MSME growth and development through access to finance and markets,” the report read in part.
Already, the 800,000 business owners are creating jobs for people other than themselves with the survey estimating that they employ a total of 1.2 million people, excluding the business owners themselves.
“Further it contributes to poverty alleviation as survivalist businesses play an essential role, especially as a buffer against slipping into deeper poverty and as such reducing individual and household vulnerability,” the report read further.
According to a study by African Development Bank, 22 per cent of Africa’s working-age population are starting businesses in response to projections that Africa will need 122 million new jobs by 2022.
Growth in enterprises and business is expected to enable countries reduce pressure on the government as well as traditional sectors for employment.
In Rwanda, to support enterprises, the Ministry of Trade and Industry has developed an Entrepreneurship Development Policy (EDP) to serve in fostering enterprises growth and create impact such as job creation, products diversification among others.
Samuel Kamugisha the Director General of Industry and Entrepreneurship Development at the trade ministry said that the policy which was approved by cabinet in April 2020 supports entrepreneurship, innovation, and enterprise growth and graduation at all stages of the enterprise growth lifecycle, from start-ups to existing MSMEs and large enterprises.
“It aims at developing an effective entrepreneurship support ecosystem that creates the necessary conditions and enablers for Rwandan start-ups, MSMEs, and large enterprises to unleash their entrepreneurial potential and grow dynamic and competitive enterprises that will drive economic growth and job creation contributing therefore to our national economic transformation agenda,” he said.
The ministry is currently in the process of identifying potential stakeholders to work with.
Among the plans outlined in the policy include, improve business governance by developing short guides and courses on basic business governance for MSMEs as well as increasing availability of technical skills training outside of formal education.
The strategy also seeks to improve access to tailored business consulting services and high-quality business consultants.
Local emerging businesses will also be linked with international business support institutions as well as benefit an initiative matching business owners to angel investor culture, crowd funding as well as fellowships or stipend fund for entrepreneurs.Follow https://twitter.com/ByCollinsMwai