Banque populaire and the Private Sector Federation (PSF) on Friday last week signed a three year agreement worth €350,000(Rwf227,1m) to support the business plan competitions among Small and Medium Entrepreneurs (SMEs).
The business plan competition, which is an initiative of the PSF in collaboration with the Rwandan government and the World Bank, seeks to develop a strong entrepreneurship spirit in Rwanda.
According to the two parties, the Memorandum of Understanding (MOU) provides a guarantee fund €100,000 (Rwf79,1m) which will act as bank collateral for the 50 winning entrepreneurs.
“We have chosen to work with banque populaire because of their network throughout the country which can help all the SMEs to access finance which has been a big hindrance in the past, “said Emmanuel Hategeka CEO of PSF.
The MoU aims at providing a framework that will ensure the parties can develop and undertake collaborative activities related to the support and capacity building of entrepreneurship and entrepreneurs in Rwanda.
This collaboration comes on the heels of the partnership that PSF initially has with Rwanda Development Bank (BRD) regarding business plan competition.
According to the federation boss, the need to bring Banque Populaire on board was due to the growth in the number of the beneficiaries that had slowed the process of acquiring the loan as well as technical assistance.
“With another bank on board, we believe that processing business plan competition beneficiary loans will be faster and will increase funding and technical support to promising Rwandan entrepreneurs through a competitive process,” explained Hategeka.
Ben Kalkman, CEO of Banque Populaire said: “Business plan competition fits well into our objective of being as close as possible to the people. It’s not about giving out money but to facilitate young people with the means to start their own business,” said
PSF will select 80 best business projects from the multiple applications which it will present to banque populaire for the final selection. Out of these the bank will chose and finance 50 outstanding projects.
The winners of the competition will enjoy lower commercial interest rates at 13 percent compared to other bank clients and their terms.