Rwanda commercial banks’ decision to keep interest rates relatively low targeting to attract the emerging small and medium scale enterprises borrow is not yielding results, lenders complain.

Meaning billions are lying in strong rooms of financial lending institutions. This therefore is hurting and slowing business growth in the country.

To Janet Nkubana, of Gahaya Links, a leading maker of baskets for both the local and export markets, proprietors of SMEs may not be aware finances exist.

"The problem in Rwandan is access to information and skills,” Nkubana said.

But David N.T. Kuwana, managing director Banque Commerciale du Rwanda (BCR) said banks are business entities that make profits when their money is borrowed.

Adding, businesses will only grow if SMEs access expertise and funds for capital development. And his bank is willing to fund the SMEs grow as they position themselves to be the engine of growth, but SMEs are not borrowing.

 "I cannot remember turning down a project,” he said.

The revelation comes at backdrop the private sector in the country complains that high interest rates discourage borrowing from banks. While lending institutions in the country maintained that interest rates are low.

"To say interest rates are high is not correct,” Kuwana defended lending institutions.To drum his point home, Kuwana showed participants average interest rates in the East African region.

From his presentation, lending institutions in Kenya are the cheapest, charging only 13 per cent per annum. While borrowers in Rwanda pay a 16 per cent interest, Uganda and Tanzania financial institutions charge 19 per cent interest yearly.

Kuwana was addressing a conference organised by his bank (BCR) and Centre to Support Small and Medium Enterprise in Rwanda (Capmer) at Kigali Serena Hotel recently.

The conference was called to map out strategies of helping SMEs in the country grow and develop.He told participants that the country has several financial lending institutions: "Commercial banks are just an alternative.”

Capmer boss, Pipien Hakizabera said the banking sector in Rwanda was growing from strength to strength, especially with the coming in of international financial institutions.

Actis took over BCR; Fina Bank is running former Bancor. Ecobank has taken over Bank of Commerce, Development and Industry (BCDI) and Banque de Kigali is yet to be privatised.

He said the reforms in the banking sector have seen social capital increased from Frw300, Frw1.5 billion and now Frw5 billion. Meaning banks are healthy.Ends