Rwanda : Refinancing program to develop Rwanda’s poorest districts
Refinancing program, initiated by Business Development Fund (BDF) to enable SACCOs extend credit services to the entrepreneurs, is set to commence in the six poorest districts of Rwanda.
This was revealed on October 26th 2012, when BDF (Business Development Fund) had a meeting with SACCO administrators of some sectors in Nyamasheke, Karongi, Nyamagabe, Gisagara, Nyaruguru and Ruhango districts.
BDF was set up by Government to provide capacities, skills and support to Small and Medium Enterprises mostly in their infant stages, which don’t have collateral to access credit from financial institutions.
According to BDF representatives in this meeting, entrepreneurs present their valuable proposals to the SACCOs, which write to the BDF asking them to provide guarantee on the loans applied for by entrepreneurs.
In this program, the financial institutions will get 20percent of their property or 80 percent of the capital and pay 15percent interest exclusive of fines and money for project proposals in three years time.
However, participants say that the interest rate is high compared to other business banks like BCR (Rwanda Commercial Bank) that asks 12percent.
“Since BDF is aimed at helping Rwandans develop, it should reduce the interest to 12 percent inclusive of the money for project proposal development,” participants pointed out.
Salomon Ntawiha, Accountant of Rugabano Sacco in Rugabano sector in Karongi district explains “We have been slow in availing loans to customers because we did not have enough money, but now entrepreneurs will access loans and develop their businesses.”
Another accountant in SACCO added: “we could give money to like 15 people out of 100 that applied for credit, and choosing who to give first was not easy since many perceived it as favoritism.”
Jean de Dieu Munyentwari, in charge of SACCO Development in BDF asked the participants to speed up the process of explaining the BDF importance to Sacco members and their administrative council that sign the approval.
Munyentwali asked SACCO officials to be exemplary to others since they are the first beneficiaries of Business Development Fund.