It has been hard for small-and-medium enterprises (SMEs) to access affordable finance that also has friendly repayment terms. However, this could end after some banks started revising their rates downwards.
George Odhiambo, the head of retail banking at KCB bank, revealed on Friday that entrepreneurs would now secure loans at fixed interest rate of 17.25 per cent per annum, payable over five years.
“Before, clients used to pay between 18 and 19 per cent interest per annum on loans, but from now on the rate will not change during the client’s repayment period,” he said.
“We have also adjusted the loan repayment period from a maximum of two years to five years,” he said.
He added that the new lending programme dubbed ‘Wisagara’ came as a result of the Rwf3.5b credit line the bank received from the European Investment Bank for onward lending to SMEs in November last year.
KCB Bank Rwanda, Development Bank of Rwanda, Bank of Kigali and I&M Bank have also secured SME loans from the European Investment Bank worth €31m (Rwf28.4b).
Odhiambo said an SME would be lent up to a tune of Rwf45m by the bank depending on the project.
The current market rate for SME lending is from 16 per cent to close to 19 per cent, depending on the repayment time and corrateral given, sector players say.Follow https://twitter.com/Ben_Gasore