While the fund's disbursal will not be biased towards any sectors, beneficiaries will be required to showcase their plans and measures to preserve jobs and employment.
Over 200 Rwandan Small and Medium Enterprises are set to receive grants from I&M Bank (Rwanda) Plc in the coming days following an agreement between the lender and Investing for Employment (IFE), a subsidiary of the German Development Bank.
The project aims at supporting the preservation of employment in Small and Medium Enterprises (SMEs) in Rwanda following the effects of the Covid-19 Pandemic.
I&M Bank received Euro 5.5million (about Rwf 6.2Billion) of the EUR 10.7million availed by IFE which the Bank will in turn distribute in form of grants to support over 200 Rwandan Small and Medium Enterprises maintain employment and preserve jobs.
The project is geared at reducing the strain and negative effects of Covid-19 related restrictions which has seen a large section of SMEs unable to maintain jobs or employment due to cash flow challenges.
Robin Bairstow, Chief Executive Officer of I&M Bank (Rwanda) Plc said that SMEs are a key stakeholder in emerging economies and are source of growth, employment and innovation.
The awareness of the roles of SMEs, he said is part of the reasons the Bank strives to build their skills and capacities through Financial Skills' Workshops offered to clients to mitigate their businesses' financial risks during the pandemic
"We expect our customers to stay afloat and continue progressing steadily even after the Covid-19 Pandemic. In the past, we have seen businesses grow from SME to Corporate profiles and this new grant will make it possible for our clients to maintain that growth. The grant clearly compliments the efforts of the Rwandan Government and the Bank to provide assistance to the sector, especially maintaining employment," he said.
Bairstow noted that the intervention is necessary and timely as the pandemic has had major effects on the sustainability and growth of SMEs.
The funds will be disbursed to SMEs who work with I&M Bank, with both borrowing and non-borrowing clients eligible for the fund.
Faustin Byishimo the Executive Director at I&M Bank Rwanda said that they had already mapped out some beneficiaries for the funds, but are still open to receive applications from SMEs seeking to benefit from the fund. Interested applicants can reach out to the Bank.
Byishimo said that the funds will be disbursed as grants, not loans. The funds will either go into reducing interest rates for existing loans held by the SMEs or as working capital.
While the fund's disbursal will not be biased towards any sectors, beneficiaries will be required to showcase their plans and measures to preserve jobs and employment. Sectors that have been adversely affected by the pandemic such as trade, hospitality, tourism and education among others are expected to get major relief from the support.
Andreas Holtkotte, the Managing Director of Investing for Employment, said that the project will support SMEs which are known to be the backbone and job engine of the Rwandan economy.
The partnership with financial institutions, he said, enables them to deploy results-based grant support in a targeted manner to SMEs which hold the potential for poverty reduction and development.
German Ambassador to Rwanda, Thomas Kurz noted that the support also aims at completing the Government's intervention of the Economic Recovery Plan and Fund.