Rwanda: BDF implements new model to improve SMEs' access to finance
The Business Development Fund (BDF) has announced it is changing its business model to improve access to finance for small and medium-sized enterprises in Rwanda.The Business Development Fund (BDF) has announced it is changing its business model to improve access to finance for small and
medium-sized enterprises in Rwanda.
The change will see prospective businesses approach the BDF directly for appraisal before projects can be submitted to banks for funding.
Under the former model, banks were conducting full evaluation and investigation of the project proposals, and would write to the BDF should they need additional collateral.
Innocent Bulindi, BRD chief executive, told The New Times the direct guarantee model will be implemented with the help of business development advisors.
They will identify potential entrepreneurs and prepare for them their business plans, as over 40 per cent of loan applications
are currently rejected due to poor business plans, according to an August 2014 Monetary Policy Report.
Mr Bulindi said he believes the new process will improve the number of successful bids as financing requirements will be better understood by the BDF and SMEs will approach banks with more knowledge and preparation.
The BDF is an independent company that was created in collaboration with the Government of Rwanda and the Development Bank of Rwanda to improve access to finance for SMEs. It provides guarantee, lines of credit, grants as well as advisory services.