The business community has for long complained about lack of affordable finance to undertake long-term development projects or expand their enterprises. With commercial banks’ interest rates at 17 per cent or more, businesses acquire loans but barely make any profits.

This situation could, however, change if entrepreneurs consolidated resources and embraced collective investments, a move that would also help fast-track the country’s development agenda. A collective investment scheme is any arrangement whereby funds are raised from the public for the purpose of investing, re-investing or trading in securities or other assets.

According to the City of Kigali mayor, Pascal Nyamulinda, it is important for investors to pool funds under collective investment schemes and exploit the business opportunities in the city’s blueprint to accelerate economic development and create more jobs for city dwellers.

Nyamulinda was speaking during an investor’s forum organised by Private Sector Federation and city authorities in Kigali on Tuesday. The forum brought together top investors and policy-makers to discuss challenges and ways to fast-track development in the city.

A study conducted to map out collective investments in the country recently revealed more than Rwf80 billion worth of investments in the City of Kigali, with members contributing at least Rwf55 billion of equity. Overall, there is more than Rwf86 billion in collective investments across the country. The funds could increase further if more investors pooled resources to undertake new projects collectively, said Eric Ntaganda, the managing director of Merezi Group of Companies. He added that this could also help reduce the cost of investing and project financing in the city.

According to Felix Nsabimana, a business expert, investing in collective schemes gives members access to a variety of channels to invest their money, including financial markets.

Benjamin Gasamagera, the chairman of the Private Sector Federation, said investment groups provide affordable funds as they reduce exposure to high interest rates charged by commercial banks. He noted in a statement that collective investments help reduce the cost of doing business. He, however, stressed the need to invest in capacity building and skills to attract more capital and improve the competitiveness of the local business community.

According to the ‘diagnostic’ report on public-private sector partnerships conducted by the World Bank, low capacity, uncoordinated and non-standardised projects are some of the major challenges facing Rwanda in terms of forging investment partnerships between government and the private sector.

In 2016, government enacted a public-private partnership law to attract investments in key development projects.

The law provides the legal framework for establishment, implementation and management of public-private joint ventures. The objective is to prioritise investments and improve the implementation processes so as to become more efficient and transparent, according to Charles Kalinda, the director of national planning at the Ministry of Finance and Economic Planning.

He said all investment projects have to be implemented as per the national development strategy.