Small and Medium Enterprises (SMEs) with limited access to funds due to lack of collateral are set for more financing options thanks to GroFin’s $160m (Rwf90.5b) fund.

The GroFin Africa fund was established last year to finance up to 500 SMEs in seven African countries including Rwanda, Uganda, Tanzania, Kenya, Ghana, Nigeria and South Africa.

Speaking at its launch in Rwanda, yesterday, at Kigali Serena Hotel, Eric Rwigamba, General Manager of GroFin Rwanda said, "We are viability based lenders not collateral based.”

The fund comes at time when Rwanda’s SMEs are finding it hard to access commercial loans due to limited collateral but also mainly because of incompetent business skills.

Rwigamba said that GroFin will also provide business support services through monitoring and guidance on management issues of the businesses they finance to make them regionally and globally competitive.

Guido Boysen, the Chief Investment Officer of GroFin said, "Apart from providing risk-free finance, there is a lot we do to aid the success of our investee companies by providing hands-on business development assistance.

We can only add this value because we maintain a presence locally, on the ground.”

According to Rwigamba, no specific fraction has been allocated to Rwanda since it is a funding pool that will be disbursed on the basis of business viability across the mentioned countries.

This is the second and highest investment the venture capital firm has committed into the Rwandan market.

In 2007 GroFin committed $25m to boost SME in the four East African countries of Rwanda, Kenya, Tanzania and Uganda.

Management of GroFin Rwanda said that the GroFin East African Fund has generated 151 jobs for Rwandans in a spell of two year.

Since its establishment in 2007, Rwigamba said that GroFin Rwanda has disbursed $2.7 million in seven transactions out of the $3.6 million applied for.

He said the firm which makes both equity and debt investments does not venture into primary agriculture businesses and speculative businesses.

"It has been had for the Rwandan market to understand our business model,” Rwigamba said. Rwanda has less than 500 SMEs each employing more than 10 people in the pool of micro-enterprises estimated at 65,000.

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