EADB gives Bank of Kigali $10 million

The East African Development Bank yesterday extended a $10 million (Rwf6.7 billion) line of credit to Bank of Kigali that will be used for on-lending to Small and Medium Enterprises (SMEs) in various economic sectors of the country.The SMEs proposed are those dealing in agriculture, tourism, manufacturing, education and health.“The line of credit will go a long way in enhancing the capacity of SMEs to innovate, invest in value addition, increase product offerings, generate new jobs and deepen market access,” said East African Development Bank director general, Vivienne Yeda in Kigali yesterday.She added that the financing will help boost the private sector, employment, payment of taxes and foreign exchange earnings in Rwanda, thereby contributing to sustainable economic development.“I look forward to a borderless region, where citizens can move freely and trade not limited by artificial boundaries,” she said.James Gatera, Chief Executive Officer of Bank of Kigali said they appreciated the partnership with the regional development bank and hoped the partnership will uplift people out of poverty.“Bank of Kigali continues to find alternative sources of financing to ensure that everyone who needs financing can access it. The line of credit will strengthen our development operations in Rwanda and help us match funding with SME and retail loans growth,” Gatera said.Majority of businesses in Rwanda are SMEs with a growing retail base. The market has significant untapped opportunities for financial institutions.Commercial banks operating in Rwanda earn about 40 per cent of their net interest incomes from lending to small-and-medium enterprises (SMEs).According to the central bank, outstanding loans granted to SMEs by banks alone rose by 14 per cent from Rwf161.9b at the end December 2012 to Rwf183.9b by the end of June this year, accounting for 23.3 per cent of the total loan portfolio of the banking sector during the period.By the close of business on June 30, commercial bank loans to the entire private sector had increased to Rwf788.2b from Rwf747.3b in December 2012, with SMEs accounting for most of the growth.In August, Bank of Kigali signed another $10m credit line from the OPEC Fund for International Development (OFID), while Development Bank of Rwanda also secured $10m funding from the East African Development Bank (EADB) in July for on-lending to SMEs.KCB Bank Rwanda also received a six million Euros (Rwf5.3b) tailored loan from the European Investment Bank for SMEs last month.Sector experts are foreseeing the lines of credit having multiple benefits to the nation as well as individual companies operating in the country.

National

EADB gives Bank of Kigali $10 million