GroFin, a specialist SME finance and development company, has said it is targeting to increasing lending to Small and Medium Enterprises (SMEs) to a tune of $5 million (Rwf 2.96 billion), this year, in different sectors of the economy.
“The crisis that we experienced in 2010 seems to be fading away, 2011 seems to be a better year; we have eight transactions that we are working on right now,” Eric Rwigamba, the General Manager of GroFin Rwanda told Business Times in an interview recently.
Rwigamba underscored that, while Grofin has more resources at its disposal to invest in SMEs, the quality of projects submitted by the business community continues to limit their potential.
“I can invest a minimum of $10 million (Rwf5.9 billion) with ease as the money is there; we have $70 million (Rwf41.4 billion) for 8 countries in Africa and that money has no restriction to a particular country,” he explained.
He added: “As long as I have viable investments, I will go and get money from the pool and invest in Rwanda, as simple as that.”
Rwigamba observed that, like in many other African countries where Grofin operates, SMEs in Rwanda still have limited business skills.
“The challenge that falls on us in our respective countries to make sure that we attract those funds is by having viable investment, viable projects; I have the money that we must use, but we have to invest wisely,” he explained.
GroFin focuses on the gap that exists between micro-finance, which tends to cater for informal entrepreneurs needing less than $50,000 (Rwf29.6 million), and commercial banks and private equity firms, which prefer to finance larger companies that require over $1 million (Rwf592 million).
“As Grofin, we invest in all businesses that are viable apart from real estate and agriculture; but we look for viable businesses” added Rwigamba.
While Grofin, last year, issued credit worth Rwf1.5 billion, Rwigamba observed that the company still faces challenges related to gathering the information about businesses.