BRD’s trade finance transactions hit Rwf2bn

Rwanda Development Bank (BRD) has said that its trade finance transactions have hit Rwf 2 billion, an indication that the business community is progressively signing up to the facility to engage in international trade. Launched in March this year, BRD’s trade finance facility provides financial support to the business community involved in international trade. “Exporting and importing requires greater financial flexibility and reserves than buying or selling locally. The faster and easier the process of financing an international transaction, the more trade is facilitated,” Innocent Bulindi, the Director of Finance at BRD told Business Times Tuesday. The facility also facilitates local importers with medium and long-term loans as well as import letters of credit which act as a guarantee for unfamiliar foreign suppliers. “Importers need a letter of credit to buy goods overseas and sell them in the domestic market before paying for imports. This requires access to short-term financing and that is where our trade finance comes in,” Bulindi said.Explaining the role of the facility, Bulindi said that BRD is focusing on building up adequate trade infrastructure to boost international competitiveness of the local business community. This, he said, will increase the trade and export potential of the economy. While BRD has been focusing on importers, Bulindi said the Bank has plans to bring exporters on board. “We have been focusing on import letters of credit but we have so many people who are exporting coffee, tea, leather and minerals; they need export letters of credit,” he said. However he stressed that for exporters the bank is focused on strengthening the performance of traditional exports including coffee and tea. “For instance we have a niche market in coffee - instead of going into other sectors that will not be as profitable as the coffee sector – we would rather strengthen coffee,” he explained. With high prospects for growth in the export sector that are anticipated to grow by over 20 percent this year, Bulindi said the bank is evaluating export companies to identify viable business prospects. “We are in the process of forming a working partnership with OCIR Café to develop a combined program for selected companies to benefit from these facilities.” Since 2003, BRD has been supporting farmers in form of soft loans to build coffee washing stations and to expand their businesses. This year, the Bank says it will disburse approximately Rwf 4 billion in form of loans to boost national exports. However, Bulindi said the Bank is challenged by limited financial resources which curbs its potential to support the business community. According to the official, BRD may not meet its target of investing approximately $ 11 million in trade finance for this year due to limited access to financial resources.BRD, in which government is the biggest shareholder with 38.8 percent shares, aims at eradicating poverty especially in rural areas through investment in agriculture and other projects. Ends

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BRD’s trade finance transactions hit Rwf2bn