Rwanda’s export sector now has the means to financially support exporters with small businesses struggling to move goods out of the country; this was said at a discussion between exporters and the ministry.
The East African country has had to contend with a decline in trade merchandise exports compared to the previous years which were marked by a moderate exports growth.
Rwanda’s Ministry of Trade and Industry wants to bring awareness to the export growth fund which will give small businesses the advantage they need to trade out the country and further boost the industry.
“The export growth fund is a scheme set up by the government to support young exporters, particularly those who are entering the new markets or who are trying to sell a new product from Rwanda,” said Francois Kanimba, Rwanda’s Minister of Trade and Industry.
The gathering between exporters and ministry was hosted to discuss various interventions required to boost exports in the country, one of those was the export growth fund which Minister Kanimba elaborated on.
Due to the high cost of borrowing money from Rwandan banks, one of the commitments made by government is to subsidise the interest rate in a catalyst fund to facilitate investing in export related activities – government will take on the difference.
Government has also decided to share 50 per cent of the cost that market entry is going to cost for exporters who are looking to diversify Rwandan exports, especially for the new small and medium enterprises who are trying to export in the region or further.
Ministry has also considered the difficulty small businesses encounter when it comes to guarantees as not many are will to engage when the company does not have cash on hand.
“In this fund we have established an export guarantee scheme – if you have got a contract to export, for example, 1.5 million dollars in Uganda, and you need working capital to produce these exports, and you don’t have the usual guarantees required by commercial banks,” the guarantee scheme will provide 80 per cent cover for 270 days to facilitate the export explained Kanimba.
This is to make sure people are not demotivated from taking advantage of the export opportunities because of not having a guarantee.
He adds that the fund is being managed by Rwanda Development Bank but can be accessed from any commercial bank.
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Credit: CNBC Africa