Last week, members of the parliamentary Standing Committee on Economy and Trade called on the leaders of the Business Development Fund (BDF) to popularize their services among the masses to ensure they impact the lives of many.
The Fund, established in 2011, is already making a significant contribution to the country’s socio-economic development agenda, extending a combined loan of Rwf1.3 billion to 56 grassroots-based Savings and Credit Cooperatives and directly investing in 21 small businesses to help them succeed.
The Fund offers a wide range of vital services, from extending soft loans to successful applicants and serving as guarantor for those seeking loans from banks but without collateral, to injecting funds in some struggling businesses and offering free business advisory services to those that need them.
Nonetheless, it has been observed that a significant number of citizens are clueless about the mandate of BDF, let alone the specific technical and financial services the Fund offers.
Many are indeed in oblivion to the fact BDF has a responsibility to extend support to small and medium operators in key priority sectors provided one meets the set criteria.
It is these same SMEs that are increasingly making the difference, especially in the countryside.
The recently launched 2013/14 Integrated Household Living Conditions Survey indicated that more jobs were now being created in rural areas than in urban areas.
It is such new opportunities, especially in the countryside, that are largely responsible for Rwanda’s strong performance in the fight against poverty, which dropped from 56.7 per cent in 2006 to 39.1 per cent in 2014, with extreme poverty also significantly falling, from 35.8 per cent to 16.3 per cent over the same period.
Inequality also contracted, with Gini coefficient dropping from 0.49 in 2011 to 0.45 in 2014 while the ratio of the wealthiest 10 per cent to the poorest 10 per cent fell from 6.36 to 6.01 over the same period.
As a result of these pro-people initiatives, as many as 6,600,000 people moved above the poverty line between 2011 and 2014, while as many as a million others had graduated from poverty in the previous five years.
Now BDF is one of the initiatives that are expected to help the country maintain this impressive rate – which has resulted in an average of 8 per cent growth rate over the years.
That’s why the Fund should take the lawmakers’ advice seriously.
The Fund managers need to constantly reach out to the people, provide necessary advice to those seeking their support, work closely with commercial banks and SACCOs that are associated with this scheme, and take the necessary measures to ensure the Fund delivers on its mission accordingly.