Business Development Fund (BDF) has disbursed over Rwf4b to financial institutions as guarantee funds for 175 projects.
The new BDF boss, Innocent Bulindi, said that 88 projects have since benefited under the agricultural guarantee fund, 17 from SME fund and 56 from rural investment facility while 14 only benefited from the women guarantee fund.
“Our focus is to see micro enterprises grow into small medium and small medium growing into large corporations and at the same time prop up the start ups to the level of micro- enterprises,” he told Business Times.
The Rwf10 billion fund made autonomous from Rwanda Development Bank in July this year will support SME development with appropriate financial services.
“We don’t give out money. What we do is to help projects that have approached banks for a loan and don’t have enough collateral by paying 50 percent of that collateral needed by the bank,” he said adding that the guarantee is paid to the bank not the project.
He further stressed that the fund is rolling out the campaign countrywide to attract more projects.
“We are starting SME clustering down to the district level and through Hangamurimo programme (create your own job).
We will be able to pick the best SMEs that we will support to access finance,” Mable Tushabe, an official in charge of SMEs development in the Ministry of Trade and industry said.
However, Andreas Norlem, Chief Executive Officer, Educat Rwanda, believes that most SMEs still face a challenge of skills to manage and run their businesses to convince banks to extend to them credit.
“The biggest challenge is that banks don’t want to take risks with informal small and micro businesses because of their nature,” he said during the graduation of 46 youth engaging in micro enterprises in Kigali after completing a three months training course organised by YES-Rwanda and Educat.
He noted that there is need to engage young people in entrepreneurship as one way of fostering development and fight unemployment.
Jean de Dieu Kabengera, Programmes Manager at Young Employment Systems (YES Rwanda) says that an estimated 90,000 youth out of 100,000 who join the labour market every fail to get jobs which he attributes to lack of skills required in the labour market.
He noted that that YES Rwanda together with Educat initiated a micro enterprise training programme to meet the needs of young micro entrepreneurs working in the informal sector in Rwanda to expand their businesses and become registered in the formal private sector.