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Business Development Fund to help SMEs access loans

In a bid to promote SME development by making financing available, a new Business Development Fund (BDF) has been launched.

Kanimba-BDF

Trade and Industry Minister Francois Kanimba: BDF will function as a bridge between loan providers and entrepreneurs looking for financing. (photo Rodrigue Rwirahira)

BDF is an affiliate of the Rwanda Development Bank (BRD), set up with the support of the Ministry of Trade and Industry and other government bodies with the aim of enhancing lending mechanisms of financial institutions to private as well as public clients.

According to Desire Rumanyika, the CEO of BDF, the company’s mandate is to support SME development with appropriate financial services. “Our core mission is to share expertise and facilities with clients, who can be potential entrepreneurs, SME owners, equity companies, and even government entities,” he said. “The company is now budgeting more than Frw 10 billion; we have allocated Frw 7 billion in a guarantee fund and Frw 4 billion for projects grants.”

Rumanyika added that the project was initiated four years ago, but was only officially approved in 2010 by the government with BRD as its parent institution.

“One of the big challenges SMEs face today is the lack of guarantees to obtain loans, hence we are committed to bridge that particular gap by approving and forwarding appropriate projects to different banks; we can provide collateral for selected clients and recommend them for loans,” Rumanyika explained.

Yet the CEO added that many SMEs also lack managerial capacity, which is why BDF also offers advisory services to people who are not able to design and propose business ideas which are meaningful to the economy. He said that a special team has been set up for that task, and that the service is free.

The Minister for Trade and Industry, Francois Kanimba, endorsed the institution saying it as a response to constraints affecting SMEs in Rwanda, which he said are one of the core pillars for economic development in the country.

“The challenges include increasing technical and management capacity of SMEs, increasing access to finance and markets, tailoring the fiscal and regulatory framework to SMEs and strengthening institutions that implement programs to support SMEs,” Kanimba pointed out. “I therefore call upon the private sector and civil society to engage in SME development. There is a wide range of services that SMEs need such as capacity building, technology transfer, market access, ICT usage, business incubation services and a variety of other business development services that SMEs need to grow.”

The Minister added that BDF would function as a bridge between loan providers and entrepreneurs looking for financing, and that this will be a win-win situation.

“We need a big number of Rwandans to engage in business, create employment and contribute to private sector development,” Kanimba said. “The government’s vision of a middle-income economy cannot be achieved if the Rwandan population does not engage in productive business activity.”

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Posted by on Jul 15 2011. Filed under Business, Other News, Weekly Highlights. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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