SMEs get Rwf4 billion credit support

The Bank of Kigali (BK) has received a loan worth €5m (Rwf4b) from the European Investment Bank through the European Union to finance Rwanda’s Small and Medium Enterprises (SMES). The loan comes as part of government’s promise to restore liquidity in the local banking system by securing lines of credit. Local banks have suffered liquidity constraints due to mismatches for financing capital investment projects. The SMEs to benefit from the fund include those in Agriculture, agro-processing, manufacturing, tourism, telecommunication, mining, education and health and service industry with much emphasis on export business. Interest rates are still under discussion and the loan has a maturity of eight years. The deal was signed yesterday by Camelo A Coccuzza, Head of Financial Sector Operations Central and East Africa from EIB and James Gatera from Bank of Kigali at the EU head offices. Present also was Ambassador David McRae and the Governor of the Central Bank. “I have no doubt this will have a catalytic role not only for the expansion of the domestic financial markets but will also go to assist in stimulating cross-border growth enabling Rwanda’s integration in the east African market,” he said. In his speech, Coccuza highlighted some of the expected benefit that include, strengthening the capital markets in Rwanda by making available medium and long term funding, create new jobs and technology transfer. “Thanks to Banque de Kigali, the EIB will be able to channel medium to long term funding to Rwandan SMEs with wide ranging anticipated economic benefits such as the generation of additional revenue, the consequential increase of fiscal receipts for Government and the creation of new jobs,” he said. Governor François Kanimba said that the loan will supplement the government facility allocated to local banks to mitigate liquidity crunch. “The deal is timely as the banks have suffered from long term lending capacity constraints registered early this year which had negative constraints on growth,” Kanimba said. Kanimba is optimistic that the operation will have a significant impact on the beneficiaries. Gatera assured the partners that the funds will help the bank meet customers’ needs. EIB has experience in supporting SME development, has, for the past 40 years been replicated through the EU policies in the African, Caribbean and Pacific Region. Ends

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SMEs get Rwf4 billion credit support