The International Finance Cooperation-IFC, a member of the World Bank Group, has this Thursday invested 1.6 million US Dollars in equity in Business Partners Rwanda SME Fund (BPI Rwanda).
The fund aims to provide financing and management support for up to 70 SMEs, increasing employment and local entrepreneurship in Rwanda.
Speaking to members of the press after the signing of the financial cooperation, Trade and Industry Minister Francois Kanimba said that the new development would help deal with the problem of low access to finance by the sector.
“…so we do expect from this arrangement an improvement in terms of increasing the rate of access to finance by SME groups. But at the same time, IFC has set up a swap arrangement with the Central Bank to provide a longer term financing scheme to SMEs. One of the ways they are using to disburse these funds is by signing agreements with some banks involved in refinancing the small and medium enterprises…”
Business Partners International is a South Africa based financier of SMEs, established in 2004 as a joint venture between IFC and Business Partners. Meanwhile, at the same function, IFC, announced a $2.5 million loan to Urwego Opportunity Bank of Rwanda, intended to improve access to finance for smaller businesses and borrowers in new areas of the country.
The investment is in form of a five-year, $2.5 million equivalent local currency loan to Urwego Opportunity Bank – the country’s only regulated microfinance bank. UOB will use the financing to support its existing lending facilities, while expanding into rural areas.
Jean Philippe Prosper, IFC Director for East and Southern Africa.
“…cost of funding is of course an issue and probably it is secondary to the availability of funding so we are now focusing on expanding the availability of funding and our primary targets are as our mission statement says that we will be focusing on those people in the lower end of the SMEs. We will be continually focusing on helping microenterprises to become more viable as a business entity…”