Rwanda: Export Growth Fund to Ease Access to Finance for Exporters
Global, Africa, Rwanda
Export growth is a top priority for the government and as such various measures have been taken to boost Rwanda's export trade. The Second Economic Development and Poverty Reduction Strategy (EDPRS 2), targets an annual export growth of 28%. In an exclusive interview, ALEX KANYANKOLE, CEO of the Development Bank of Rwanda (BRD) talks to The New Times' MINNIE KARANJA on how the Export Growth Fund is strategically designed to address the challenge of access to finance by exporters and promoting Made in Rwanda products. Below is excerpt of the interview, for the entire article, click here.
Exporters often decry limited access to finance, how does the EGF address this issue?
The Export Growth Fund is a facility which is aimed at facilitating export oriented SMEs to access finance by offering interest subsidies on investment loans, grants for market penetration and credit insurance guarantee to boost export volumes and access new markets.
The EGF Investment Catalyst facility supports exporters by subsidizing the cost of interest to investments through direct lending on government funds at 10% and on-lending to increase channels through which SMEs can access funding by working with local commercial banks. We signed a loan agreement with I&M Bank and BPR part of Atlas Mara, to use this model where export oriented SMEs will not only access finance but also technical support on how to grow their businesses.
While the Investment catalyst facility eases access to finance for exporters, EGF's matching grant window has been designed specifically for exporters to access new markets. We realized that to grow exports we also have to support exporters to access new markets. We therefore give grants of up to 100,000 US dollars per individual to enable them obtain various product certifications and standardizations, develop business plans, conduct professional market research and even attend trade fairs - which are important platforms for them to meet prospective international importers. This grant matches to the tune of 50% of exporter's total expense to penetrate external markets.
We also have the credit insurance guarantee in the pipeline which will cater for pre and post shipment financing to address a recurrent issue of working capital which limits exporters. We will work with commercial banks to offer credit insurance guarantee so that they can sustainably lend exporters with working capital during pre or post-shipment financing.
To read entire interview, click here.