GorFin last week launched a funding pool worth Rwf90 billion ($160million) to assist Small and Medium-sized Enterprises (SMEs). The Business Times SAUL BUTERA asked Eric Rwigaba, the company’s General Manager about the company’s operations and how Rwandan’s would benefit.
What is GroFin?
GroFin is a multi-nationalbusiness development and finance company that is committed to the successful development of SMEs to create sustainable wealth, employment and economic growth.
When did GroFin start its operations in Rwanda?
The GroFin Africa Fund was established 2007 and it started with Rwf14.2 billion ($25Million) available to finance up to 500 SMEs.
Since you have been operating almost three now, how many projects or SMEs have you funded?
So far we have 10 transactions approved but eight have been disbursed and we have spent ($3.6million) in the past three years. The remaining two will be disbursed very soon.
This year you have Rwf90 billion, how are SMEs going to benefit from this?
GroFin operates in only7 African countries, Rwanda, Ghana, Nigeria, Kenya, South Africa, Tanzania and Uganda. Amongst the seven countries no country will benefit more than the other, it will depend on how aggressive each head office will be in order to get enough funds.
So Rwandan SMEs are required to bring in mare applications, the more the applications the more applications will be processed for approval at our head offices in Mauritius.
So if more quality project proposals from Rwandans SMEs, the bigger the chances of taking the bigger potion of the funds which lead to big investments in the country.
So we are going advice the applicants on how to come up with the best project proposals.
What is GroFin’s interest rate?
Our interests depend on the type of business and on the cash flow cycle. We give a client time to start a business if the business already exists to start generating profits then he/she can start paying us according to the way the business in generating income.
Another way is that we can agree with the client and we invest in the business than we make an agreement that he or she will pay with an interest of like 20 percent after a period of like five years and this also depends on the cash flow of the client’s business. We agree on the return at exit plan and here we don’t get dividends.
How many applicants have you received after the launching of last week?
So far we have got three clients with good projects.
What is the time frame for you to start giving a client funds?
The time frame of getting the funds depends on how clients can provide us with all requirements and necessary information about his business then we have to study the project, after studying that it qualifies we send it to the head offices for approval.
So it doesn’t take long as long as we have the necessary information.
How does Grofin operate?
GroFin provides hands-on financial and business support services through monitoring and guidance on management issues of the business they finance to make them regionally and globally competitive. In order to minimize risks, we don’t give money to the clients but we give money to the supplier.
: Where did you get the funds to start operating, since GroFin only operates in only the seven African countries?
Actually the whole company is called GroFin Africa Fund; it has its head offices in Mauritius. We are financed by several global investors, like; African Development Bank (AfDB), Capital for Development (CDC), International Finance Corporation (IFC), and the Netherlands Development Finance Company (FMO), the Norwegian Investment Fund for Developing Countries, Shell Foundation and GroFin Investment Holdings.