{As the year begins, most Rwandans have big plans for the future and access to finance is one of the requirements for those aspiring business owners and entrepreneurs. }
In analyzing the challenges of access to finance, IGIHE.COM profiles one of the leading finance institutions in Rwanda, Development Bank of Rwanda (BRD).
In brief, we found that BRD (as a development bank) focuses on economic growth and transformation through long term financing of development projects unlike commercial banks that are focused on collection of deposits and provision of short and medium term or consumer lending.
{{BRD’s priority sectors for investment financing}}
In a discussion with the Director of Investment Department in BRD, Manzi Benjamin, he explains the different sectors of main focus and the reasons.
Manzi explains that BRD’s financing objectives largely focus on almost all sectors of the Rwandan economy such as Agriculture and Livestock, Manufacturing (Including Agro- Industries), Commercial & Hotels, Mining, Water and Energy, Mortgage and Real Estate, Socio Infrastructures (education and health) as well as Refinancing of MFIs.
“For instance, Agriculture is considerably given priority since it employs majority of the Rwandan population. Our financing therefore encourages commercial farming rather than subsistence farming which leads to provision of raw materials for agro-related industries in the country.” Manzi
He further notes that under the industries and services sector, BRD financing seeks to boost the growth of industries so as to enhance production for exports and greatly reducing on the country’s imports. In supporting this sector, BRD also contributes to better service delivery through promoting the tourism service sector like building of hotels and setting up of service centered business.
More so development of the microfinance institutions has been a priority by BRD and this has been done through refinancing of these MFIs.
“We support MFIs through refinancing their portfolios and rendering technical assistance to boost their operations. Therefore through refinancing MFIs, BRD’s outreach to SME’s is greatly reached because of the nature of MFI operations and lending. Our partnership with MFIs increases access to finance to all Rwandans.” Adds Manzi
In the water and energy sectors, BRD supports investments in green energy related projects to attain the country’s objectives aimed at increasing power supply needed for fast tracking development.
Manzi explains, “We have also prioritized the development of social infrastructures such as markets, schools and clinics through financing private sector investments in education and health areas to reduce over reliance on government expenditure in such investments.”
{{Advice on Access to financing from BRD}}
BRD just like any other financial institution in this country is bound by the central bank regulations as per respecting the set requirements of a project promoter to access investment loans.
For instance, among the requirements to be eligible for BRD short, medium or long term investment loans, one has to go through the individual identification procedures, possession of adequate technical capacity to manage the project, minimum participation of the project promoter (varying between 30% and 50% of the cost of investment according to the size of the project) and feasibility project study (technical and financial).
In addition, BRD requires certain loan securities depending on the project (though BRD also accepts guarantees provided by recognized guarantee funds such as BDF), and we also encourage the project owners to consider our unbeatable and negotiable interest rates and favorable long repayment plans depending on the total cost of the project as agreed upon.
“We have a highly dedicated client relations team that is always at hand to provide all the detailed information on requirements to access our investment financing.” Says Manzi
BRD also offers advisory services and capacity building to its clients (business promoters) faced with challenges of limited skills in terms of compiling their business ideas into bankable business plans and management skills during and after project implementation.
At BRD, one can also access extensive capacity building programs on the basic skills from our subsidiary companies such as Business Development Fund (BDF) and BRD Insurance Brokerage (BIB) that deliver business development services and training on best business management practices.
More so, these services can be accessed through Business Development Centres (BDCs) located in all sectors of the country financed by BDF. We have branches in all provinces – Southern and Western (served by Nyanza), Northern (Musanze) and Eastern (Kayonza)
This highlights BRD’s financing outreach, for instance the majority (about 60 percent) of financed projects in 2013 were located in other provinces of the country with only 40 percent located in Kigali.
Leave a Reply