The Development Bank of Rwanda has secured a $10m (about Rwf6.5b) credit from the East African Development Bank (EADB) for lending to small-and-medium enterprises (SMEs).

Speaking during the signing of the loan deal, Jack Kayonga, the Development Bank of Rwanda (BRD) chief executive, said the credit facility would facilitate the bank’s long-term financing of development projects primarily targeting the growths of SMEs across all the sectors of the economy.

"There is a lot being done to promote SMEs in Rwanda by the government and the private sector. This financial resource is going to complement these efforts,” Kayonga said.

This is the second line of credit the East African Development Bank is extending to BRD. The bank received $5m (about Rwf3.3 billion) in October 2009 from EADB, which Kayonga said was fully disbursed to various key projects that are servicing their loans with good repayment records.

"The future of Rwanda depends on the capacity of SMEs to innovate and access new markets. We have a deliberate focus on women and youth, as well as massive investment in rural areas, where 90 per cent of the population lives,” said Duncan Mwesigye, the EADB Uganda country manager, who signed the credit line deal on behalf of his institution.

Mwesigye said there was need for financing SMEs in order to help them focus on processing and value addition to give local products a competitive edge.

Citing coffee, he said farmers needed to process their coffee beans into fine coffees rather than exporting the beans which are later imported into the country as fine coffee at high prices.

Desire Rumanyika, the EADB country manager, explained that the loan would be disbursed in US dollars and repaid in US dollars, adding that the bank was still trying to see how it could lend in local currency in the future.