The government has reviewed the eligibility for financing from its Export Fund to enable export-oriented SMEs tap into foreign markets.
The existing criteria were prohibitive especially for startups, which, experts argue, need the most support.
One such criteria is the requirement for businesses to have previously exported 40 percent of their products in order to qualify for financing.
In the latest development, the government has removed this requirement, creating more opportunities for start-ups.
The move to review the Export Growth Fund is one of the 13 resolutions reached during the 15th National Leadership Retreat (Umwiherero), that ended last week..
“The Export growth fund is about promoting exports through facilitating local producers and exporters to expand their market beyond our borders. In return, this also reduces the Balance of Payment gap and that is why we thought it was ideal to review the Export Growth fund to allow more beneficiaries,” Uzziel Ndagijimana, the Minister of State for Finance in charge of Economic Planning told journalists yesterday.
Linda Ndungutse, the founder of Haute Baso, a local clothing brand, explained to The New Times why the decision to review is good for business.
“It has been difficult for small enterprises to access funds from the Export Growth facility because it required more security than what most startups had, hence frustrating their expansion plans,” Ndugutse said.
“For any business to access the export growth facility, it required a lot of money and collateral which was really difficult for some of us. We had to turn down a number of orders from outside because we didn’t have means,” she added.
Ndugutse emphasized that any flexibility in terms of eligibility to the fund would be very helpful to the growth of production and consequently export capacity.
Minister Ndagijimana is hopeful that the review of the eligibility criteria will have a positive impact on the Rwandan economy.
“We still have trade balance problem and in order to address that we created this fund to support exporters with a grant to identify the markets and access export opportunities in foreign countries,” he said.
With this review, the Minister added, “we seek to expand the facility’s coverage to even new startups that intend to export such that they also access the subsidized loan for exporters provided they have secured ready market outside Rwanda,” he added.
Odette Uwamariya, the Director of Cabinet in the Office of the Prime Minister, said reviewing the Export growth facility comes in handy for a number of newly established export-oriented businesses.
“The report we have shows that the number of Rwandan exporters tripled as of last year. But there were some limitations especially on the new entrants who wanted to access this fund,” she said.
The Export Growth Fund was established two years ago and it’s managed by the Development Bank of Rwanda (BRD).
Government allocates about Rwf1 billion every year to the Fund.