Government has launched a policy to guide the operations of small and medium enterprises (SMEs) in the country. Justin Nsengiyumva, the Secretary General- Ministry of Commerce, Industry, Investment Promotion, Tourism and Cooperatives (Minicom) said the move would improve the performance and competitiveness of SMEs.

He also stressed that SMEs are of greater importance, since they help in adding value to the local resources, ensure equitable income distribution, balance of payment and increase the tax base.

However, he was quick to say that SMEs’ failures are partly due to constraints in access finance and credit, poor saving and credit management culture.

"There are a few SMEs in vibrant business today in Rwanda as a result of the limited access to finances and lack of business start-up capital,” Nsengiyumva said.

However, he noted the government is not ‘sleeping’ because it is to put in place mechanisms like guarantee funds, refinancing facilities, loan guarantees, and external credit lines to allocate resources to productive investments to check challenges faced by SMEs.

Jack Kayonga, the deputy director general of Rwanda Development Bank said that though funds to guarantee SMEs are available in his bank, there is need to promote innovative financial products for SMEs such as hire purchase scheme, leasing and venture capital markets.

"There is need for simplification of procedures among financial institutions,” he said.

While talking to the team of experts from the ministry who drafted the policy, the team leader Stevenson Nzaramba stressed that according to the study, it was found out that 48 per cent of SMEs invested less than Frw1m of which sub-sectors like handcraft, tailoring and some agro-processing units have minimum investment.

He also stressed that according to the sector distribution SMEs in Rwanda, retail trade occupies the biggest portion (47 per cent), services sector 8 per cent while tailoring, garments and textile weaving occupies 7 per cent.

Emmanuel Kalenzi, the Unido representative in Rwanda said that SMEs development is a short-cut to achieving aspirations of Vision 2020. He suggested that its development be mainstreamed into national development framework.

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