International body to administer US$8m SME fund

Business Partners International has been mandated to manage a basket of US$8 million fund to support Small and Medium Enterprises (SMEs) Raised by a consortium of financiers including International Finance Corporation (IFC), Stretcher Deon, BPI, and Rwanda Investment Enterprise Co Ltd (RIEC), the fund seeks to increase lending to SMEs. We believe by bringing BPI which is experienced in SMEs is the best way to serve Rwandan SMEs,” Ignace Rusenga Mihigo Bacyaha, Senior Operations Officer at IFC said in an exclusive interview with Business Times. He said BPI will be in a position to give out some loans without demanding for collateral as well as addressing tight lending restrictions. The consortium injected extra US$4 million as new capital, adding to the existing US$4 million by RIEC. Bringing in BPI, which is experienced in the SME industry, is seen as a strong tool to address some of the financial challenges hindering the progress of the industry. “In the restructuring, we brought in two things, more capital and the best partner to manage the funds,” he said. Entrepreneurs will be applying in BPI for financing where due diligence will be conducted on a particular project and then decide appropriately. “What they want correct is the perception that banks will not lend them because they do not have collateral,” he said. Bacyaha emphasised; “when you are a small and young SME, you do not have collateral, so you need a tool that will analyse a project on its own merit or commercial viability.” Bacyaha said that BPI may take collateral when an entrepreneur has it since it reduces risk but they may fund the project without collateral if it is commercially viable. “They will be in a position to provide loans and venture into business with an intention of selling the shares to the owner once the business has grown,” he added. Bacyaha hailed government’s commitment towards SME development in terms of the number of days to register a new business and introducing incentives for banks and financial institutions to lend to the sector. Ends

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International body to administer US$8m SME fund