Members of Parliament last week grilled, for the second time in less than a month, leaders of Business Development Fund (BDF), on the management anomalies that were first highlighted in a report by the Auditor-General. Established in 2011, BDF works with financial institutions to cover between 50 per cent and 75 per cent of collateral required by the respective lending institution. The target beneficiaries are Small and Medium Enterprises (SMEs), with the aim of empowering them to boost job creation and help stimulate economic activity. However, some of the anomalies that were identified by the Auditor General -- and confirmed by Members of Parliament in a subsequent probe -- show that there is so much that needs to be done to ensure the fund serves its purpose. Some of the challenges include lack of proper guidance for SMEs on coming up with viable business projects and discrepancies in the size and ownership of firms that are eligible for support. For instance, it was established that some foreign nationals who own companies benefitted from the facility at the expense of local enterprises. It also emerged that the majority of the firms that benefitted were worth up to Rwf500m in total investments. It is indeed encouraging that the leadership of BDF has recognized that there are gaps that call for an overhaul in the funding policy to ensure it is in harmony with the national SME development policy, which sets the cap for SMEs at Rwf75m in total investments. While it is important that we have a clear policy in place to guide the activities of this very important institution, it is critical that leadership of the fund becomes more resolute in delivering on their mandate. For instance, they must put more effort into guiding SMEs, especially those in rural areas, on writing good business proposals that can attract funding and follow up on beneficiaries to ensure they put the funding to good use. This will help put an end to such cases as when beneficiaries use BDF funding to send their children for studies abroad, as revealed by the AG.
