The Bank of Kigali (BK), which is the country’s biggest lender, received a credit line worth US$20 million (Rwf1.19 billion) and a guarantee fund of -6 million to support Small and Medium Enterprises (SME’s).
The BK will increase its lending to the private sector by 30 percent, from Rwf110 billion last year to Rwf130 billion this year, after securing a credit line from the.
James Gatera, the Managing Director believes that the credit line agreement will translate into higher demand for credit. He emphasises that the credit line will be used to extend long term credit to projects in Rwanda while the guarantee scheme will act as collateral to SME’s without collateral or security given to the banks.
“It sounds huge money but if you consider developments that are taking place, it’s like a drop in an ocean, and at BK, we want to play an important role in developing our SME’s,” so Gatera.
Sustain the long term growth
The loan is part of the Bank’s long term plan to secure long term capital for seizing opportunities through financing the country’s budding private sector. BK is also at advanced stages of launching its Initial Public Offering (IPO).
The loan comes at a time the economy is in dire need of long term financing following a credit squeeze in the last two years.
1 USD = 612.25 RWF
Western Province’s budget for the new fiscal year is set to increase by 15 percent. The new figure amounts to Rwf 368 million, up from Rwf 324 million the previous year. The bulk of the budget will go towards salaries estimated at Rwf 190 million while Rwf 172 million is for development expenditure, according to Provincial Governor Celestin Kabahizi.