{{Access to credit remains a big challenge to upcoming entrepreneurs despite presentation of well-prepared business proposals to financial institutions. }}
The financial institutions continue subject loan seekers to high conditions before SMEs access the loans.
Addressing the loan access difficulties, Peter Rwema a programs manager with the Association of Micro Finance Institutions Rwanda (AMIR), encourages potential entrepreneurs to design unique business proposals since majority present pirated proposals that are some times irrelevant to the local market.
“I think they imagine that reusing a business proposal that has been recommended fit for credit before was among the trick to access loans, yet they forget they need to be innovative and that’s what we want,” he advices.
Duplicated business plans can not only be blamed to the aspiring business man but also to some service providers who liaise with the client to get already used successful plans with an aim to access credit from banks.
Rwema discourages the unprofessional habit. “They can rather train them how to write good business plans that can help them acquire loans instead of pirating business plans that are often difficult to implement,” he remarks.
Capacity building would improve the situation especially in areas of management and implementation.
Service providers are also encouraged to conduct research based on the needs of entrepreneurs. Rwema highlights that the information can also be used to advocate for funds or even influence policies that would ease lending to SME’s.
Rebson Dzala the general manager Center for Business Solutions (CBS) highlights that a good analysis would serve as a source of information to those willing to start new ventures or willing to expand their business.
Once the client acquires information about their interest, it’s always better for the service provider to guide them throughout the implementation process.
John Kagarama of Business Development Fund (BDF) that offers financial guarantee to approved projects, urges service providers to work closely with their clients. “They should offer a full package covering the business inception, designing the plan as well as monitoring the implementation process”.
For consultants who lack some expertise it’s advantageous for them to collaborate with other similar firms in order to improve the clients performance.
The collaboration is even better among consultants and financial institutions especially when they have an agreement on lending credit.
This is well reflected by BDF’s collaboration with several banks where those who have their business proposals approved by the special entrepreneur fund are given loans without necessarily presenting securities.
“A professional business plan should be bankable and that’s one of main things that make a lender comfortable,” AMIR’s program manager emphasizes.
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