The Government is set to launch an innovation fund for small and medium enterprises in the information and communications technology (ICT) sector to spur entrepreneurship and job creation, officials at the Ministry of Youth and ICT have said.
The fund, to be launched by June 2016, will target small and emerging ICT related enterprise, mostly run by the youth.
Didier Nkurikiyimfura, the director-general of ICT at the ministry, told The New Times last week that the innovation fund will be rolled out in partnership with Rwanda Development Board.
He noted that the concept, which is in its final stages before implementation, would also involve partnering with the private sector for funds mobilisation.
“We are finalising the idea and have about six months to fully develop the concept and mobilise funds. We are going to design an operational structure of the fund that will start with $ 100m (about Rwf 74.5bn) and to set up criteria for those to benefit before the launch by June next year,” he said.
Of the total $100m targeted in the fund, the Government will contribute up to 30 per cent, while the rest will be mobilised from private sector partners who will have shares in the fund.
The fund will begin with about 100 beneficiaries.
Among the objectives of the fund is to reduce unemployment levels, as well as foster job creation among the youth.
The recently published fourth Integrated Household Living Condition Survey (EICV4) indicated that about 13 per cent of university graduates do not get jobs with one or two years of completion of their studies.
Part of the thought process behind the innovation fund was to address the sponsorship and funding challenges experienced by emerging enterprises in the ICT sector.
“In different parts of the country we do not have enough sponsors to support and fund SMEs and other projects related to ICT. This is an opportunity to close the gap and help the youth to benefit,” Nkurikiyimfura said.
Experts in the sector say, once operational, the fund will spur innovation and lead to growth in the number of enterprises operating in the area.
Dr Bernabe Twabagira, the principal of IPRC South, a technical and vocational college, said the fund would go a long way in addressing challenges associated with financing that have for long held back ICT enterprises.
“There are many innovations among the youth, but they lack financing,” he said.
The initiative is expected to facilitate the achievement of targets of the recently adopted Smart Rwanda Master Plan that aims at facilitating existing indigenous companies in their competitiveness and efforts to grow to global player status.
The five-year plan, whose implementation is set for 2016, targets to have about 100 indigenous companies with market capitalisation of $50 million and 50 stock market listable companies.
This is expected to drive up the ICT sector contribution to GDP from 3 per cent today to 5 per cent, and to create about 100,000 new jobs by 2020.