Government is convinced that women and youth must engage in enterprise in order to building a private sector-led economy.
Julienne Munyaneza, the permanent secretary in the ministry of gender and family promotion (Migeprof), last week reiterated this conviction.
About 52% of Rwandans are women while young people, below the age of 35 make up 79% of the whole population--the reason government is focusing on the two categories.
With the government able to employ only 2% of the people who need jobs, the push for a private sector-driven economy.
On the other side, youth and women are said to be still facing challenges of lack of managerial skills and access to finance. Financial data indicates that women account for only 12% of the credit given out, while for youth data is not available.
"Evidently women and youth have problems related with access to finance because they are required to present collateral when they go to banks," said Munyaneza.
"That is why the government judged it very important to enable that big percentage of the population to access finance," says Rosemary Mbabazi, the permanent secretary in the ministry of youth and ICT (MYICT).
The permanent secretaries were last week addressing officials of financial institutions, civil society, public sector and other stakeholders in providing access to finance. They explained to the stakeholders a new strategy to increase access to finance for women and youth.
The strategy, dubbed "Women and Youth Access to Finance," was developed by the two ministries in collaboration with Business Development Fund (BDF) and Rwanda Cooperative Agency (RCA) to address the managerial and financial challenges.
The strategy was officially launched last Thursday in Nyaruguru district of southern province. It will target the poorest districts of the country highlighted by the recent Integrated Household Living Conditions Survey.
The officials say the program will mainly focus on capacity building and training so that beneficiaries can get basics of managerial skills and then credit enhancement programs so that they can easily get loans from financial institutions.
Munyaneza said that recipients will be coached in basic entrepreneurial skills before they are provided with funds. She noted that the strategy targets startup small business of less than Frw 10 million.
Janet Kanyambo, the fund manager at BDF, added that the special program tends to provide collateral of up to 75% instead of the normal one where Small and Medium Enterprises (SMEs) get collateral of 50%. In addition, beneficiaries will also get a grant of 15%.
An initiative of this kind to step up job creation is not the first one. For instance, last year the ministry of industry and trade (Minicom) launched a pilot phase of Hanga umurimo (create your job) program, but some of the beneficiaries could not get access to finance even though BDF guaranteed loans.
But Ulrick Kayinamura, a senior investment analyst at BDF, says they learnt a lot from Hanga umurimo's experience. The fund has established "quasi-equity" which consists of injecting some money into the projects for those who did not get loans from banks.
The fund invests itself in the projects and leaves the owners with their business once they have already paid back the money, explained Kayinamura.
"It's a combination of loans and debts," he said.
To make the strategy more sustainable, there will be a steering committee that will be meeting regularly to assess the progress and handle occurring challenges, officials said, adding that Access to Finance Forums that are operational in all districts as well as vice mayors in charge of social affairs will also be monitoring the progress.
Jean de Desire Usabyimana, credit director at Umwalimu SACCO, observes that more still needs to be done to promote financial education among people so that they can be aware of available services and where to get them.
"We sometimes get people asking for loans and when we advise them that they should go to BDF for collateral, they sometime do not consider it," he said.
Both representatives from financial and public institutions agree that there is need for a special mechanism of monitoring and evaluation so that success and failure can be reported early.