Many young men and women in Rwanda have always found it hard to get start-up capital for their bankable business ideas because they lack initial capital and required collaterals required by banks to finance such projects.

This is simply because the general perception by most financial institutions is that the likelihood of failing for startup businesses is higher than for existing businesses. This leads to the general fear by the financiers to support startup businesses.

It is in this regard that in 2012, the Government of Rwanda decided to address this issue and initiated a programme called Hanga Umurimo in 2012.

Under this programme, the government intervention was to support startup businesses by providing advocacy and part of the guarantee cover that is required by banks through BDF. 

In this context, I&M Bank Rwanda also participated in the programme by providing finance to different startup businesses across the country.

Among the financed projects, 37.5% were implemented from upcountry and 44% of the total financed projects are owned by women.

For a bank to succeed in SME Banking, it must have a clear strategy. I&M Bank has been conducting financial literacy trainings conducted twice a year and beneficiaries of Hanga Umurimo are also invited and benefit from the trainings.

The trainings, organised by I&M Bank Rwanda and European Investment Bank (EIB), are aimed at building SME sector capacity and equip them with skills to develop innovative ideas that could help get funding from credit institutions as well as strengthen their distribution strategy and ability to manage credit.

After 4 years now, the  Hanga Umurimo programme has shown that good ideas can turn into success if every stakeholder puts his contribution.

Statistics show that 50% of the financed projects are currently struggling but we have also to recognize that there are projects that have proved to be viable and are currently expanding.

The Bank plan is to continue providing financial literacy trainings to existing beneficiaries of Hanga Umurimo and others. In addition, other projects that come under broader BDF cover are welcome at the bank.

Crushing stones into riches

Marie Claire Nyiransengiyunva’s story is very telling of how Hanga Umurimo has impacted people’s lives. Two years ago, newly married with a baby, a young husband with a house half way under construction, Marie had to work towards supporting her family. .

Standing beside her stone grinding machines, the 31 year old Nyiransengiyunva who resides in Rebero village, Kagunga sector in Kicukiro District remembers those days of drudgery.

Waking every day before seven and tending to their baby before running off to work was her daily routine that was having a toll on her life.

She had worked for five years with an international aid agency, as a project director in one of the rural units earning Rwf 100,000 a month.

In spite of the steady job, it was getting harder for them to survive on their merger salaries and still achieve their dreams of completing their house.

One day, as she listened to a radio, she heard of a Government programme called Hanga Umurimo and how it helped young people with good business ideas to secure capital for start-up business and that is when she made up her mind to go into private business.

Nyiransengiyunva decided if she had to get to another financial level, things had to change and so she quit her job and decided to be self-employed.

Inspired by a lady friend of hers, she decided to enter the stone quarrying business.

In 2014, with the little savings and a house under construction as collateral and a guarantee cover of up to 75% from BDF, she got a loan of Rwf 17,500,000 from I&M Bank to be serviced for a period of 5 years. That was her beginning of climbing the wealthy ladder.

"Yes it is more of a man’s job but I felt that I could do it if my husband backed me up, which he did” Nyiransengiyunva recalls with a smile.

Two years down the road, her stone business under the name of Mixed Service Providers has prospered beyond her dreams.

She currently employees over 10 workers, has a stock of crushed stones worth Rwf 6,000,000 and has managed to buy another stone crushing machine plus a piece of land where she extracts the stone aggregates.

She says that she is now able to cover all her business expenses, service the loan and still have enough left over to re-invest in the business and for savings – which she adds is more than she could do as a salaried employee.

She however says there are challenges that she is facing in her day to day running of the business.

Her biggest challenge is the lack of means to transport. She hires a truck on a daily basis to carry stones from the quarry to where she rents land for stone crushing

"I have approached my bank, I&M again and I am looking forward to receiving the necessary support to solve this problem.”  she concludes with a satisfied look on her face.