I&M Bank Rwanda Plc has entered a partnership with the European Commission, the European Union Delegation, and the Dutch Entrepreneurial Development Bank (FMO) to establish a collaborative initiative known as the NASIRA Risk Sharing Facility.

The initiative involves $10 million in funding aimed at bolstering the growth and development of Micro, Small, and Medium Enterprises (MSMEs) in Rwanda. It was introduced on June 26 during the first day of the EU-Rwanda Business Forum.

MSMEs are the leading driver of economic transformation and job creation in Rwanda, constituting 97 per cent of all businesses in the country.

FMO’s NASIRA loan portfolio guarantee aims to support I&M Bank Rwanda Plc to increase its lending to Rwandan MSMEs with a specific focus on smallholder farmers, youth, and women entrepreneurs who face the most challenges in accessing formal bank financing in Rwanda.

Additionally, through the programme, FMO is set to support I&M Bank Rwanda Plc with technical assistance to develop specific client value propositions for smallholder farmers and women-owned MSME clients.

Robin Bairstow, CEO of I&M Bank Rwanda Plc, said, "We are excited to announce our strategic partnership with FMO through the establishment of the NASIRA Portfolio Guarantee. This collaboration represents a deliberate move by I&M Bank Rwanda Plc to diversify our business and focus on developing the MSME sector.”

He emphasised that by joining forces, they have the opportunity to amplify their outreach and support to MSMEs) in Rwanda.

"Together, we aim to unlock the potential of traditionally underserved segments, including women and youth borrowers. This partnership not only strengthens our position as the leading financial partner for growth but also aligns perfectly with our strategy, reinforcing our commitment to providing sector-specific customer value propositions. With the NASIRA Guarantee, we are confident that we can drive the growth and success of MSMEs in Rwanda, driving economic development and creating opportunities for the future,” said Bairstow.

Belen Calvo Uyarra, the Ambassador of the European Union to Rwanda, expressed her excitement to witness the signing of the first guarantee line in Rwanda backed by the EFSD.

"I want to recognise the support of the Dutch Government, who contribute to the success of this truly ‘Team Europe’ approach. The fact that the signing is taking place during the EU-Rwanda Business Forum, with over 120 EU companies and financial institutions present, is very significant as it can serve as an inspirational example of how the European Commission, European Union member states, and the Rwandan financial sector can join together to support the development of Rwanda’s private sector,” she said.

"My main message is that this is only the beginning. The European Fund for Sustainable Development Plus will bring up to EUR 6 billion in guarantee capacity coverage to Sub-Saharan African private sector and we are sure that FMO and I&M’s signature today will set an example for other stakeholders to follow suit and continue to support Rwanda’s vision through the Global Gateway initiative.”

Huib-Jan de Ruijter, Co-Chief Investment Officer at FMO, expressed his delight at the opportunity to provide support to MSMEs in Rwanda.

"The NASIRA facility represents a new approach to unlocking support for underserved groups, and we express our gratitude to I&M Bank Rwanda Plc for their commitment to the MSME segment. We would also like to extend our appreciation to the European Commission in making this guarantee facility possible. Together, we look forward to making a positive impact and fostering the growth and success of these individuals and their businesses,” Ruijter said.

FMO’s NASIRA Risk Sharing programme takes the form of a loan portfolio guarantee and supports financial institutions in increasing their lending activities for MSMEs with a focus on underserved business segments, such as smallholder farmers, women-owned and youth-owned businesses, who often are unable to access financing due to higher credit risk.

The programme also enables financial institutions to more confidently lend to these riskier client segments by sharing the possible credit losses with the financial institutions and, thereby, reducing the risks involved.

In addition to the risk-sharing facility, the NASIRA Risk Sharing programme also includes technical assistance to support the financial institution with the tools to access and service these segments effectively, as well as a portfolio management tool to facilitate an automated monitoring process.

The programme is implemented by FMO and supported by the European Commission and the Dutch Government.