PSF secures financing guarantees for Rwandan business community

Rwandan investors have been urged to take advantage of opportunities offered by the new deal signed between the Private Sector Federation and African Solidarity Fund to guarantee more access to investment loans and re-financing among other services. The call was made during the signing ceremony that took place on Friday, August 27 between the chairman of PSF, Robert Bafakulera and Ahmadou Abdoulaye Diallo, the director-general of African Solidarity Fund. Courtesy of this partnership, Rwandan enterprises are able to secure loans through ASF-supported credit facilities for investment projects covered at 80%. Similarly, start-ups can request ASF to become their collateral and operating businesses can request for refinancing or a third party management fund to revive their businesses. Bafakulera said that this is a great opportunity for the Rwandan business community. “This partnership means a lot to the private sector, especially those affected by Covid-19, which sometimes made it harder for them to pay back the loans or get capital to startup businesses,” he recalled. The impact of Covid-19, says Bafakulera, and losses brought about by different circumstances were the main barriers of business thriving in many African countries. That’s why we are asking investors to make use of this business, he said. On his part, Diallo hailed Rwanda’s ease of doing business and explained that his institution wants to increase business interventions with Rwanda which is the reason why they chose to sign this MoU with the country. He also highlighted one of their main priorities in Rwanda: “We have strongly supported business enterprises that were affected by Covid-19 and others that were in need of financing, we have financed some through banks or provided consultation services when we realized there was a need to do so, so that will be the first thing to do in Rwanda.” After listening to the presentations of what ASF is doing, Teddy Ndayambaje, an investor who represented a local steel-manufacturing company said his firm was ready to collaborate with the fund saying that it increased the avenues to financing guarantees which he says was one of the ground-breaking challenges faced by the Rwandan business community. “In most cases, our banks are very keen on finance guarantees, and that becomes an obstacle to a lot of investors,” he recalled, adding that liquid security is better than other forms of securities. “Another thing, property securities can be devalued unlike the liquid facility that ASF provides, so we are really optimistic,” he expressed. What is ASF? Renowned under its French acronym – Fonds de Solidarité Africain (FSA), the fund is a multi-lateral and financial guarantee institution that was established by the 1976 France-Africa summit that convened in Bangui, central Africa. The Niger-based body has 14 member states, most of which are found in ECOWAS, SEDEAO and COMESA regional bodies. Those include Benin, Burkina Faso, Burundi, Central African Republic, Côte d’Ivoire, Gabon, Guinea-Bissau, Mali, Mauritius, Niger, Rwanda, Senegal, Chad and Togo. Investments supported by ASF span a broad range of sectors including tourism, mining, agribusiness, telecommunications, energy, health and transportation. Apart from the above, the fund also works as a consulting entity for businesses in its member states. The 45-year old body’s guarantee financing amount ranges from $ 200,000 to $ 22 million with 0.5 to 2.5% of the security fees per year. As of 2020, the body was worth $ 26.8 bn. Before this partnership, the Niger-based fund worked with different finance institutions in Rwanda including Bank of Kigali, BRD and Access bank among others but had also financed a total of 28 projects in Rwanda. Chairman of Private Sector Federation-Rwanda, Robert Bafakulera and Director General of African Solidarity Fund, Ahamadou Abdoulaye DIALLO exchange document after signing an MoU.

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PSF secures financing guarantees for Rwandan business community