Rwandan SMEs to benefit from a $36mln fund from the East African Development Bank

PHOTO

Rwanda's Small and Medium Enterprises (SMEs) will have something to smile about after The East African Development Bank (EADB) inaugurated a $36m (Rwf 47 billion) fund tailored to their financing needs.

The credit line which targets up to 500 SMES in sectors like agriculture, transport, commerce, and manufacturing, will be channelled through local lenders like the Development Bank of Rwanda (BRD), Duterimbere Imf Plc, AB Rwanda Plc, and Letshego Rwanda.

Many SMES in Rwanda are yet to fully recover from the Covid-19 setbacks which sank some of them, while others that stayed operational have been limping, with acute financing needs.

While many local banks have largely been averse to lending to businesses in sectors like agriculture, manufacturing and mining because they find them risky."We are grateful to the Government of Rwanda for its proactive stance in supporting SMEs.

This partnership marks a very important step towards fostering economic and social development in our communities," Vivienne Yeda, the Director General of EADB.

She acknowledged the financial hurdles SMEs face yet they are the backbone of East Africa’s economies.

Assuring direct financing through various financial institutions and government channels that her bank will work with.

She reiterated EADB's commitment to nurturing SME growth through financial partnerships, citing the Bank's historical role in stimulating regional economies over the past five decades."Promoting SME growth is a strategic imperative for Rwanda, given their substantial contribution to the Gross Domestic Product (GDP) and their role in fostering inclusive economic development," said Mutesi Rusagara, the state minister for Resource Mobilization and Public Investment.

She noted that SMEs employ over 2.5 million people, and have capacity to significantly expand Rwanda's tax base and provide employment opportunities.

Highlighting the pivotal role SMEs play in Rwanda's economic landscape, stressing EADB’s catalytic approach in enhancing SME support through improved access to finance and technical assistance for the partnering financial institutions in Rwanda.

Pitchette Kampeta Sayinzoga, CEO of BRD, highlighted the enduring collaboration between BRD and EADB, expressing enthusiasm for the new line of credit agreement.

She stressed the vital role SMEs play in Rwanda's private sector growth and emphasized BRD's commitment to leveraging external funding to provide sustainable, affordable financing to local SMEs."As a government-owned institution, BRD recognizes the financing challenges SMEs encounter. Partnering with EADB is a strategic move to address these challenges and extend long-term financial support to our local private sector," Sayinzoga affirmed.

Ngabonziza Alphonse, the CEO of Duterimbere IMF PLC Bank, one of the four financial institutions that benefited from this fund expressed his hope that the bank’s clients will now have more access to finance to enable them to invest more in their businesses."We have been doing a lot of work with SMEs and with this fund, we hope there is going to be more money to give out to them to enable them to grow. This will solve the issue of lack of access to finance which is one of the biggest challenges faced by SMEs in Rwanda," he said.