Yesterday, I&M Bank signed a strategic partnership with Aceli Africa at the bank’s headquarters in Kigali, aimed at enhancing financing opportunities for agricultural small and medium-sized enterprises (Agri-SMEs) in Rwanda.
This collaboration is set to leverage innovative risk-sharing mechanisms to provide Agri-SMEs with increased access to loans, ranging from Rwf15 million to Rwf1.7 billion.
This partnership comes at a critical time for Rwanda’s agricultural sector, which plays a pivotal role in the country’s economy and employs a significant portion of its population.
By improving access to finance, the initiative aims to address the challenges faced by Agri-SMEs in securing the necessary capital to grow and sustain their operations.
Aceli Africa, a market incentive facility, works to unlock capital for inclusive agricultural growth. The organization collaborates with financial institutions to de-risk lending to Agri-SMEs, thereby catalyzing more investment into the sector.
Since its inception, Aceli Africa has been instrumental in reducing barriers to financing for agricultural enterprises across multiple African countries.
I&M Bank, a leading financial institution in Rwanda, has been at the forefront of supporting various economic sectors through its comprehensive range of financial services.
With a strong commitment to fostering economic development, I&M Bank’s partnership with Aceli Africa is a testament to its dedication to advancing the agricultural sector.
The innovative risk-sharing mechanisms introduced through this partnership will play a crucial role in mitigating the risks typically associated with lending to Agri-SMEs.
These mechanisms are designed to provide financial institutions with partial guarantees, thereby encouraging them to extend more credit to agricultural enterprises. This approach not only reduces the perceived risk for lenders but also ensures that Agri-SMEs have the financial support they need to invest in their operations, expand production, and improve overall productivity.
“We are excited to partner with Aceli Africa to provide much-needed financing to Agri-SMEs in Rwanda. This collaboration will enable us to support the growth of the agricultural sector, which is vital to the country’s economy,” said Benjamin Mutimura, CEO of I&M Bank. “By offering loans with innovative risk-sharing mechanisms, we are making it easier for Agri-SMEs to access the capital they need to thrive.”
The partnership is expected to have a significant impact on the agricultural sector in Rwanda.
By facilitating access to larger loans, it will help Agri-SMEs invest in modern farming techniques, purchase equipment, and expand their operations. This, in turn, will lead to increased agricultural productivity, job creation, and improved livelihoods for many Rwandans.
Notably, the enhanced financing options will enable Agri-SMEs to better withstand economic shocks and market fluctuations, making them more resilient and sustainable in the long term.
The collaboration between I&M Bank and Aceli Africa is poised to drive substantial growth in the agricultural sector, fostering economic stability and prosperity in Rwanda.
Currently, 75% of the 130,000 Agri-SMEs in Africa cannot access formal bank financing, creating a staggering $75 billion financing gap in this sub-sector.
The partnership between I&M Bank and Aceli Africa represents a significant step forward in addressing these financing challenges.
By leveraging innovative risk-sharing mechanisms, this initiative will provide the necessary financial support to boost the agricultural sector, ensuring its continued growth and contribution to the national economy.
