EUR 8m for small businesses in Rwanda
- Release date: 29 January 2014
- Reference: 2014-015-EN
The European Investment Bank, Europe’s long-term lending institution, has agreed to provide EUR 8 million to support investment by small and medium sized private sector companies in Rwanda. This is the second new small business lending programme between the European Investment Bank and I&M Bank Rwanda in seven years.
The partnership with I&M Bank Rwanda was formally agreed in Kigali today by Sanjeev Anand, Managing Director of I&M Bank Rwanda and Kurt Simonsen, Head of the European Investment Bank’s regional representation for East and Central Africa.
“Growth of the private sector is essential for economic development and reducing poverty in Rwanda. The European Investment Bank is pleased to continue its cooperation with I&M Bank Rwanda and build on the success of similar cooperation with other banks in the region. We are committed to supporting the local financial sector and stimulating private sector development across Africa, and this new scheme is part of our broader engagement to support large-scale investment in water and energy in Rwanda.” said Pim van Ballekom, European Investment Bank Vice President responsible for sub-Saharan Africa.
Mr. Sanjeev Anand, I&M Bank MD added “In line with Rwanda’s national priorities for economic development, the SME and Corporate sector forms the most important part of I&M Bank’s strategy in Rwanda. We believe that the long-term financing lines provided by EIB will go a long way in facilitating our efforts to provide investment support to SMEs. The medium to long-term funding along with other products and services make our SME offering one of the most competitive in the market. We take this opportunity to also thank EIB for our financial and technical partnership which spans over five years.”
"This is a timely engagement of the EU lending arm in a sector which is most important for the new development strategy of the Rwandan Government", the Head of the EU Delegation to Rwanda, Mr. Michael Ryan stated. "The EIB’s support will be complementary with our private sector activities in agriculture which is one of our focal sectors of engagement during the 11th European Development Fund 2014-2020".
The European Investment Bank is working with leading banks across East Africa to support private sector investment. The new engagement is part of the European Investment Bank’s East and Central Africa Private Enterprise Finance Facility that will provide EUR 160 million to enhance access to finance for SMEs across seven countries in the region, Kenya, Tanzania, Uganda, Rwanda, Burundi, the Democratic Republic of Congo and Djibouti. More than 10 locally based banks are expected to participate and it is expected that 3,000 companies will benefit as final beneficiaries from the facility. Technical assistance will be provided alongside the scheme for both local banks and the final beneficiary companies.
I&M Bank Rwanda Ltd. is the fourth bank to participate in the regional programme and the new European Investment Bank backed lending programme cooperation will provide business loans in USD, EUR and Rwandan francs. Lending under the initiative will focus on sectors currently underserved by commercial banks, including agriculture, fishing, manufacturing, construction, transport, tourism, education and healthcare. The scheme will reinforce crucial long-term investment by Rwandan companies, most of which are small businesses, to support growth and job creation.
I&M Bank Rwanda Ltd benefited from a EUR 3 million credit line which was agreed at the end of 2006 and successfully allocated towards projects in the transport (37%), services (24%), manufacturing (22%), education (8%), construction (7%) and health sector (2%).It is expected that under the new facility close to 1,300 jobs will be created by around 120 small and medium sized companies benefiting from the new engagement.
The European Investment Bank has extended five small business focused credit lines for a total amount of EUR 31 million to Banque Rwandaise de Développement, Bank of Kigali, and I&M Bank Rwanda Ltd. which helped to develop more than 100 SMEs and created more than 1250 jobs in the private sector in Rwanda. In addition to supporting small and medium sized companies in the country, the European Investment Bank has signed a credit line with Kenya Commercial Bank to support microfinance and intends to broaden support for private sector investment in Rwanda in the future.
The European Investment Bank has provided long-term financing for public and private sector projects in Rwanda since 1977, including support for renewable energy projects, telecommunications and upgrading Kigali airport, as well as supporting the financial sector. The Bank is currently helping the Rwandan government’s prepare for future significant investment in the Kigali sewage system.