BCR initiates a $75,000 SME support programme

Commercial Bank of Rwanda (BCR) is set to launch a training programme that specifically focuses on boosting standards of financial reporting in Small and Medium Enterprises (SMEs). BCR, one of the twelve licensed commercial banks in Rwanda ,has been undergoing a restructuring exercise during the course of this year which is meant to make it more agile and responsive to market conditions. According to Sanjeev Anand Managing Director of BCR, “When one analyses the structure of the Rwandan economy one is bound to ascertain the fact that the SME sector is quite dominant, accounting to more than 60 percent of all economic activities in the country.” ”Yet we know that SMEs have not been getting adequate support that matches this dominant position from the banking sector. The problems are mainly related to capacity constrains specifically the lack of realistic forecasting and other forms of reporting, due to lack of proper accounting and financial management practises”, Anand told Business Times. BCR says that the training programme which is positioned as one of the bank’s corporate social responsibility projects for next year, targets 200 SMEs and will take on average 3 months. “We decided to pick this as one of the problems facing SMEs, which is finance and accounting reporting. As bankers we thought that we are best equipped to handle it. The purpose of picking this item is that BCR will try to champion the improvement of financial management and accounting skills of SMEs,” Sanjeev added. BCR hopes that the training package will help SMEs to manage their income generating projects better. The management of BCR says that it is offering the package after analysing some of the constraints facing the SME sector mainly from its close interaction with some of the SME owners. The training programme will eventually assist SMEs to present better quality applications for support to the banks thereby increasing their chances of attracting support from the banks. “Banks are in the business of lending. There is no reason why banks should not lend to the SMEs, the only reason has been that SMEs have not been offering confidence to banks in order for banks to lend due to poor quality financial information such as projections, forecasting and other forms of reporting. This training programme should offer solutions to such challenges”, Sanjeev explained further. If conducted successfully, BCR says that it will be the first ever kind of initiative targeting the SME sector in Rwanda. The bank says that it has decided to support the financial literacy rather than other elements that make up the entire challenge base of the SMEs. A study conducted by the Private Sector Federation (PSF) has revealed that over 55 percent of SMEs interviewed considered preparations of financial information including tax returns and book keeping to be among the biggest constrains to the growth of their businesses. BCR is of the view that currently the SME sector is unsophisticated and as such the sector does not produce proper financial statements and that the training package is very timely as it will tackle such challenges. Ends