Rwanda Development Bank (BRD) has established a Rwf190 million fund that will benefit Micro Finance Institutions (MFIs) in both capacity building and technical assistance.
The programme that is being spearheaded by the Government through BRD is in conformity with the Small and Medium Enterprises (SMEs) policy which seeks to develop the sector.
“The objective is to develop the SMEs and by financing and strengthening the MFIs which lend to the sector then we achieve our target,” said Desire Rumanyika the Chief Executive Officer of BRD advisory services.
The fund to the MFIs which will be operational next month follows a similar support of Rwf60 million last month to the dairy industry where 21 milk collection centers received the assistance.
The only development bank in the country will first finance 12 micro finance institutions which already have a credit relationship with the bank, with a sound performance.
“In regard to capacity building, we will help them (MFIs) to acquire business tools such as formulating business plans and policies that can improve their business,” said Rumanyika.
Rumanyika added that this is more of a cost sharing partnership where BRD will cover 70 percent of loan while the MFIs will repay only 30 percent.
“This move will also help improve the micro finance rating since they rated according to their standards and this will attract more investors into the sector,” explained Rumanyika.