The World Economic Forum’s ‘Global Competitiveness Report’ has indicated access to financing is the top most hindrance to doing business in Rwanda.
Rwanda has been ranked 52 among 138 coutries in the 2016-2017 edition of Global Competitiveness Report.
However, the report underlined access to financing as the top most problematic factor for doing business in the country.
This was also noted by Hunnington Namara, the Managing Director of Equity Bank Rwanda in a recent interview with Taarifa. He said that the banking sector is experiencing a shortage on long term funds despite notable progress.
“If you look at where Rwanda is, it is in the developing stage. We now require investors that come to us for funding, the country’s economic ability to generate returns now require a little bit of patient capital, long-term funding.”
“We suffer a lot from a mismatch that we loan, I think every bank will tell you they face the same, that we are suffering from very short-term funds, and your customers are asking that you give them long-term funding.” he observed.
Namara stressed that the situation has presented challenges for financial institutions that manage the credit exposure because of the way it works.
“The moment you lend out money for ten years, it is gone but the owner may come tomorrow and say I want it, saying, I gave you my money, I did not ask you to lend it out, why did you lend it out,” he questioned.
Among the sixteen problematic areas for doing business in Rwanda, inadequately educated workforce came second at 17.8 percent, followed by Tax rates 14.8, Insufficient capacity to innovate 9.8, Tax regulations 9.3, where as inadequate supply of infrastructure stands at 7.8 percent.
The World Economic Forum report however shows that crime and theft is not a factor that would endanger investments made in Rwanda. It was rated at 0.2%, which validates the 2016 Rwanda Governance Board Score card,that ranked Safety and Security as the best performing indicator with 92.62 %.
Richard Samans, World Economic Forum’s Head of the Centre for the Global Agenda and Member of the Managing Board, said in a statement, that the report is being launched at a time of rising income inequality, mounting social and political tensions, and a general feeling of uncertainty about the future.
He conversely, stated that it also comes during one of the most prosperous and peaceful times in recorded history, with less disease, poverty, and violent conflict than ever before.