International Finance Corporation (IFC) announced US$1.6m (Rwf900m) of equity investment in Business Partners Rwanda (BPI Rwanda), which will be tied to improving access to finance for Small and Medium Enterprises (SMEs) in the country.
The deal was signed yesterday between IFC Director for Eastern and Southern Africa, Jean Philippe Prosper and the CEO of BPI, Martin Nazeem.
IFC, which is the investment arm of the World Bank, said the money will provide management support and financing to over 70 SMEs as well as increase employment opportunities.
“The fund will tap into the expertise of locally based managers and combine financing with business advisory services,” Prosper said, adding that BPI Rwanda provides the much-needed option for socially responsible financing by supporting local entrepreneurs in the country.
Francois Kanimba, the Minister of Trade and Industry said that the government has taken the lead in empowering entrepreneurs and recognises their importance in fostering economic development.
“One of the main agendas of the Ministry is to increase the number of SMEs that have access to finance,” Kanimba said.
Only 20 percent of SMEs in Rwanda have access to finance and government intends to raise this figure to 80 percent by 2017, he said.
According to Nazeem, the investment will ensure that SMEs are provided with comprehensive technical services.
“Services to SMEs will include the installation of management information systems, market research and productive development,” he said.
IFC has so far injected a combined US$7.2m to SME development in Rwanda.
Meanwhile, IFC announced that it would offer a loan of US$2.5m (Rwf1.4b) to Urwego Opportunity Bank (UOB) to provide finances to borrowers operating in remote areas.