The African Development Bank (AfDB) has promised to strengthen Rwanda’s banking sector by funding credit lines for small and medium sized enterprises. The assistance supports the AfDB’s objective of private sector growth.
Line of credit to local commercial banks will increase the lending capacity to small and medium size enterprises.
In a recent interview with Bobby Pitman, the Vice President for Infrastructure, private sector and regional integration, the official said AfDB is negotiating with different local banks.
“We have engaged in dialogue with several banks on how the credit line will help them and how big it will positively impact the community and contribute to private sector growth,” Pitman said.
Pitman said that, by providing additional funding for private sector operationsm, it will help and expand the sector where small and medium sized enterprises have a significant role to play and are often key drivers of economic growth, development and employment creation.
The credit line will facilitate projects in energy, manufacturing, agribusiness, tourism, transportation and infrastructure.
The country’s gross domestic product is expected to grow between 7 and 10 percent this year mainly driven by agriculture sector, macroeconomic stability, improved business environment owing to several reforms and contributions from, services and construction sectors.
Finance Minister John Rwangombwa said the Bank also promised support in the construction of Bugesera Airport, financial and technical support and to mobilize investors for the project.
Rwangombwa said that private sector development financing remains a big challenge in the country, and Government agreed to work with the Bank to bring in equity funds that support private sector growth.
“We can not talk of meaningful or long-term financing just through commercial banks; these private equity funds mean a lot,” Rwangombwa said.
Pitman hailed the Government for its result-based approach which will help the Public Private Partnership projects succeed.
“PPP is complex and difficult; it requires serious dialogue; many PPP projects have failed, even in USA where I come from, but I have confidence in the Government of Rwanda,” he emphasized.