The Bank of Kigali(BK Group Plc) has signed an agreement with the French Development Agency (AFD) for a credit line worth USD 20 Million in a move which will boost SMEs.
The deal was signed recently by BK CEO Dr. Diane Karusisi and AFD Group CEO, Rémy Rioux.
The funds will be utilized to finance small and medium enterprises in agro-business, ICT and renewable energy sectors.
AFD’s CEO, Remy said, “I wanted to personally come here (Kigali), and not send our Africa regional representative, to witness this signing which we started talking about eight years ago .”
Remy also revealed that the AFD selected Rwanda over any other African country because of their progressive economy. He said, “There is no better place to do this than Kigali. We will deploy more financing capacity and that is a lot of work ahead of us.”
A Grant Agreement of USD 338K comprising of expertise capacity support in SME credit assessment will also be implemented with the AFD credit lines. The credit line has a maximum lending cap of USD 550K per firm and will especially go to firms with less than 100 employees.
Karusisi also said, “Clients’ demand for loans is too high and yet we are not having enough local savings to meet the demand. We will keep borrowing more to meet this demand but make sure that our interest rates are affordable,”
“Every business is welcome provided they can meet the requirements. The interest rates will vary depending on our risk assessment of their business,” Karusisi said adding that “this flexibility is because we also got a flexible credit repayable in eight years”.
According to the Bank of Kigali, the sectors with the highest demand for credit at the moment include trade, manufacturing, service, construction, hospitality, and energy.
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