Services offered by the Business Development Fund (BDF) need to be popularised among Rwandans because many of them still miss out on these opportunities, Parliament has said.
Lawmakers on the parliamentary Standing Committee on Economy and Trade made the call on Wednesday while meeting with officials from the BDF as part of their assessment of how grassroots-based savings and credit cooperatives, locally known as Umurenge Saccos, operate.
The national guarantee fund channels a lot of its services through Saccos but people at the grassroots level, especially the youth and women, are yet to understand how they can benefit from loan guarantees and grants offered by BDF to fund their projects, the MPs said.
“You seem to have good financial products but not many people know about them. What are you doing to make these products known to the people,” MP Emmanuel Mudidi asked Innocent Bulindi, the chief executive of BDF.
BDF services include offering loan guarantees to banks to ensure that people without enough collateral can go ahead and get loans from banks, offering grants to subsidise loans so that entrepreneurs can start business in specific sectors such as agriculture, horticulture, cross border trade done by women, among others, as well as lending money to Saccos.
Other services include buying a stake in struggling small businesses and startups so they can be turned around and succeed as well as providing business advisory services whereby small businesses are advised to help them do business plans and raise capital from financial institutions.
But MPs are concerned that very few people actually understand how to apply for the services, hence the need to sensitise them about it.
“If an MP like me doesn’t understand your products, how about the people at the grassroots level? I think you should do everything you can to explain your products to the people. Right now I would say that there is nothing that the BDF helps women with, I hope your plans to decentralise services will really help the people,” said MP Annoncée Manirarora, the Western Province women representative.
Creating more avenues
However, the BDF, which is now worth Rwf21 billion according to Bulindi, has so far supported more than 3,500 loan applicants with credit guarantees to the tune of more than Rwf44 billion, as well as managed more than 1,200 grants to small borrowers worth Rwf5.8 billion.
The fund has also lent Rwf1.3 billion to 56 Saccos and invested money in 21 small businesses to help them succeed.
Bulindi agreed with the committee’s observations that many Rwandans may still be unaware about the services offered by the BDF, promising that the fund managers will create more avenues where they can directly meet people and tell them about the fund’s services.
“We understand the challenges and we are going to step up our sensitisation efforts about our services,” he said.
The fund leaders have previously promoted its services through platforms such as the National Youth Council, the National Women Council, the Private Sector Federation, the Rwanda Cooperative Agency, and districts.
But Bulindi said other means such as the mass media will be used more to reach out to many people.
He said the recent decentralisation of BDF services could make a difference in bringing its services closer to the people and local financial institutions.
The fund was started in 2011 by the Development Bank of Rwanda and later the government expanded it and turned it into a fund to also support small and medium enterprises.