Rwandan exporters that had suspended their activities due to the grinding effects of covid-19 pandemic, now have reason to smile following a new financing opportunity that will revive their activities.
According to details German and Rwanda have today signed a financing deal worth €8.666million for the expansion of the long-term refinancing line for on-lending to export-oriented Small and Medium Enterprises (SMEs).
The signing involved the Development Bank of Rwanda (BRD) represented by Chief Financial Officer Vincent Ngirikiringo and Minister Dr. Uzziel Ndagijimana of the Ministry of Economic Planning and Finance, Honorable Ambassador Dr. Thomas Kurz of the Federal Republic of Germany alongside Rwanda’s Minister of State, Richard Tusabe.
“The purpose of this financing is to support Rwandan Exporters who have postponed their planned exports investments due to the economic impact of COVID-19 by providing them with affordable long-term loans under the Export Growth Fund (EGF),” the presser reads in part.
This financing will empower exporting Small and Medium Enterprises to exploit the recent re-opening of foreign markets. Indeed, EGF replenishment will provide for BRD to provide affordable additional capital to a unique opportunity to enable local partner Financial Institutions (PFIs) to serve exporting SMEs’ thereby creating employment opportunities to more skilled workers.
Since the inception of the Export Growth Fund in 2016, BRD has operationalized the EGF by providing affordable loans directly to SMEs and through participating Commercial Banks.
With the support of the German Government through KFW, 34 projects have benefited from the fund through 5 partner Public Financial Institutions (PFIs), with total loans approved amounting to approximately EUR 12 million.
These approved loans are distributed in different sectors including textile, essential oils, horticulture, coffee, pharmaceuticals, tea, food products, and minerals.
Compared to 2020, loans extended to exporting SMEs as percentage of the total commercial loan portfolio increased by 8%; average revenue of these SMEs grew by 20% along with an average export revenue growth of 40%.