Cabinet on Monday, December 14, 2020, overhauled the senior management team of the Business Development Fund (BDF), an institution that is charged with helping SMEs raise capital for bankable projects.
Former trade and industry minister, Vincent Munyeshyaka was appointed as the Chief Executive Officer (CEO), and Rosalie Semigabo as its Deputy CEO.
Previously, the BDF did not have a deputy CEO.
Munyeshyaka, who has been serving as an economic advisor to the Rwanda Patriotic Front (RPF-Inkotanyi) Secretary General, replaces Innocent Bulindi for the post of CEO of the Fund.
The fund also got a new board of directors to be chaired by Eric Rwigamba replacing Egide Rugamba while Solange Irakarama, was named vice chairperson.
Other members of the board are Josephine Nyiranzeyimana, Roselyne Uwamahoro, Germain Niyomutabazi, Octave Semwaga, and Joselyne Nsanza.
Speaking to The New Times, the new BDF CEO, Vincent Munyeshyaka said that he will work in partnership with his colleagues to address the mismanagement cases that were identified in the Auditor General’s report and elsewhere.
"The principle that will guide us is to bring BDF back into its mandate,” he said, because generally, BDF is responsible for the SMEs which account for about 75 percent of our economy.
"We cannot develop where the sector for startups and SMEs is not progressing, because they are the ones that grow into factories when they grow successfully,” he said.
On what will help them to achieve such an objective, he said that they will sit together to better understand the BDF’s mandate, and devise its effective long-term strategic planning or vision in line with the country’s vision 2050.
Moreover, he said, they will improve the collaboration with other institutions and ministries such as the Ministry of Local Government, the Savings and Credit Cooperatives (SACCOs) as the programmes of BDF are implemented through such entities.
"We should all understand that we have the same objectives and converging to the same vision,” he said.
Why reforms
The Auditor General’s 2018/2019 report found, among other things, that BDF provided guarantees to large enterprises not aligned with its mandate – which is to support small and medium enterprises without sufficient collaterals in form of guarantees.
The National SMEs development policy defines SMEs as enterprises not exceeding Rwf75 million of net capital investments, Rwf50 million of annual turnover and not more than100 employees.
However, BDF provided credit guarantees worth more than Rwf25.1 billion to finance 217 projects of large enterprises as opposed to the original policy of SMEs, the report found. Some had up to Rwf500 million in net capital investments.
That represents 51 percent of total credit guarantees amounting to over Rwf49.2 billion provided from 2011 to August 2019.
According to the report, this implies that a high portion of loan collaterals was provided to guarantee finance of 2 percent of a total of 10,191 projects secured in this period of total.
During two virtual hearings held on September 17, and October 7, 2020, the Parliamentary Public Accounts Committee (PAC) concluded that BDF was failing its mandate, and proposed reforms in the provision of credit guarantees by the Fund.