Bank of Kigali to disburse Frw5.8bn in grants to SMEs

Are you a Small and Medium Enterprise in Rwanda with an account at Bank of Kigali and struggling to maintain jobs? SMEs with accounts at Bank of Kigali are eligible to apply for a grant to support the perseveration of employment and jobs following a partnership between the institution and Investing for Employment (IFE), a subsidiary of the German Development Bank. The agreement saw Bank of Kigali receive Euro 5.2M (about Frw5.8bn) which will be disbursed as grant support to Rwandan SMEs to alleviate their struggles with regard to maintaining employment following the Covid-19 pandemic. Investing for Employment (IFE), a subsidiary of the German Development Bank was established this year working in training and employment (Invest for Jobs). A total of Euro 10.7M was availed to 2 Rwandan banks. This initiative aims at supporting the preservation of employment in small and medium enterprises (SMEs) in Rwanda following the effects of the Covid-19 Pandemic targeting about over 10000 jobs in Rwanda in 400 businesses. Bank of Kigali said that they will reach about 200 Small and Medium Enterprises maintaining over 7,400 jobs in the country. Santos Musonera, Head of Business of Bank of Kigali said that beneficiaries will be selected both from shortlisting and application by eligible firms. SMEs seeking to benefit from the grant can make applications at the bank’s head office. The disbursal, Musonera noted will be in the form of reduced interest rates for clients serving loans as well as working capital for those without loans. The eligibility process will involve making a case that the beneficiary will protect and maintain quality jobs at their enterprise. Chief Executive of Bank of Kigali, Dr. Diane Karusisi, said that the survival of the Rwandan SMEs is paramount for the growth of the economy as well as the attainment of the projected off-farms jobs. “We believe that when our SME sector is assisted to weather this crisis, it will continue to be uniquely positioned in the transformation of our economy, providing off-farm jobs and supporting the livelihoods of many. This facility, aimed at preserving jobs in the SME sector is a very good complement to the government’s and BK’s efforts to stimulate the economic recovery,” she said. Rwanda has a target to create and maintain about 200,000 off-farm jobs per annum according to the 7-year government plan. She added that the intervention was also very necessary because often SMEs are usually the most affected during economic shocks as they do not have much resources in their reserves. This, she said leads SMEs to undertake cost-cutting measures such as laying off staff as they can no longer afford to pay them. Since the pandemic hit the country, Dr. Karusisi said that the bank had deployed multiple measures to support SMEs such as credit relief, waiver of late fees for those with loans among others. As a result of the support, she said that they expected to see employment go back to pre-covid levels and consequently economic recovery. Andreas Holtkotte, the Managing Director of Investing for Employment, the agreement facilitates the use of results-based grant support in a targeted manner to beneficiaries consequently having an impact of development and curbing poverty. Charlotte Povel, Director of German Development Bank Office in Rwanda said that the agreement is proof that Rwandan banks such assume responsibility for the economic recovery of Rwanda and for sustaining and fostering jobs in the SME sector. “It also shows, how international development and the domestic financial sector can work hand in hand to fight Covid-19 and its related effects,” she said. Bank of Kigali has a diverse clientele including SMEs from across all economic sectors.

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Bank of Kigali to disburse Frw5.8bn in grants to SMEs