AfDB offers line of credit to support SMEs, job creation

The MTN Rwanda general manager in charge of business risk management, Patrick Uwizeye (left), presents an award to an Amahoro Tours official after the company emerged among the Top 100 Mid-Sized companies last year. Photo/FILE  Nation Media Group

By Christabel Ligami Rwanda Today

Posted  Friday, March 8  2013 at  13:33

In Summary

• The deal is expected to support Small and Medium Enterprises (SMEs), job creation and resource mobilisation programmes.

The African Development Bank (AfDB) and the Development Bank of Rwanda (BRD) have signed a $8 million line of credit to support BRD lending to the agriculture, agro-processing, telecommunication, education and tourism sectors.

The deal is expected to support Small and Medium Enterprises (SMEs), job creation and resource mobilisation programmes.

A technical assistance package of up to $730,800 was also provided to BRD by the Fund for African Private Sector Assistance (FAPA) by Japan, the AfDB, the Austrian Development Bank and Austria to reinforce the bank’s internal operational structures and systems.

“The agreement which has just been signed illustrates the vitality of this co-operation, which will enable BRD to be engaged in a programme of reinforcement of its private sector and SMEs operations in Rwanda,” said Emmanuel Murangayisa, BRD’s director of finance.

Institutional capacity building

“This grant will contribute towards optimising BRD management capacities, by which the bank will be placed at a constant and favourable level of performance,” added Mr Murangayisa.

He said the programme will enable BRD to respond effectively to the challenges of developing and promoting the private sector and SMEs’ development in the country.

Through FAPA funds, AfDB has initiated a broad programme for institutional capacity building to support the African development finance institutions such as the West African Development Bank (BOAD), the East and South African Development Bank, the East African Development Bank (EADB), the Bank Congolaise de l’Habitat (BCH) and Shelter Afrique.

BRD is a local development bank with its focus on the growth of SMEs.

Key target sectors

In its 2010–2014 strategy, the bank’s key target sectors include agribusiness, manufacturing, microfinance, Information and Communication Technology, hospitality, education, healthcare, energy and water.

Jack Kayonga, the BRD chief executive officer, hailed the co-operation between AfDB and BRD and said:
“The agreement which has just been signed illustrates the vitality of this co-operation which will enable BRD to be engaged in a programme of reinforcement of its private sector and SMEs operations in Rwanda.

“Just like previous credit lines, the bank will put the money to proper use to ensure the development of the country through SMEs, which is considered the engine of economic growth and job creation,” said Mr Kayonga.

The AfDB resident representative in Rwanda Negatu Makonnen said the line of credit and the FAPA technical assistance are in line with AfDB’s private sector programme to support the growth of SMEs.

“The AfDB line of credit and the FAPA technical assistance are aligned with AfDB’s private sector operational priorities for long-term financing to support private sector development, especially where long-term financing is scarce,” he said.

 The programme will enable BRD to respond effectively to the challenges of developing and promoting the private sector and SME development in Rwanda.