More credit to private sector boosting the economy

Last week an official of the capital markets privatisation committee announced the launch of BRALIRWA’s Initial Public Offering (IPO) slated for later this year, which will boost savings among Rwandans. The official said the IPO would allow Rwanda to raise money through equity to support certain development plans which commercial banks found hard to finance because of limited resources. His argument was that accessing funds for development purposes is still a challenge and that equity listings could offer a bail out. However, the private sector has also been facing the same challenges, with banks and other financial institutions revising their lending conditions in the wake of the liquidity deficit that prevailed last year. In addition to the provisional stimulus package that was extended to banks, recently as another ‘bail out’ facility, the Central Bank of Rwanda has announced that it has further instituted measures to boost private sector lending. Provisional statistics compiled by Central bank for the first quarter of this year indicate that lending by the licensed banks has been on the upward, as compared to the same period in the fiscal year 2008/9. Basically the governor of the Central Bank said recently that credit to the private sector has increased by 25 percent during the first quarter of 2010. This means that a scenario is emerging whereby a new form of credit, being injected into the economy, has led to an increase in the outstanding amount of credit to the private sector. This is good news for the economy and calls for those operating within the private sector to take advantage of the development. Ends

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More credit to private sector boosting the economy