The Kingdom of Belgium through its development agency Enabel signs a grant with NIRDA and BRD to enhance investment by smallholder farmers and SMEs in the Pig, Poultry and Animal Feeds Value Chains.
The 2,7 million Euro dubbed “Access to Finance” grant to NIRDA and BRD will be used as an interest rate subsidy that eligible beneficiaries operating in the supported value chains would contract by taking a loan from BRD (Rwanda Development Bank), commercial banks, MFIs or Saccos where they will receive a reduction of 8% in interest rate.
In the same function the two parties will sign a separate grant dubbed “Access to technology” of a total maximum value of the grant equaling to Five hundred thousand euros (500.000 euros), which is equivalent to approximatively 563.000.000 RWF. The facility will focus on made in Rwanda construction materials, particularly the 2 value chains of clay and natural stones.
A critical component of private sector support in the construction and agriculture intervention is access to finance as limited access to finance is an important barrier to growth. The cost of finance at nearly 21% interest and strict collateral and administrative requirements are challenging for many firms. The process of acquiring loans is lengthy, requires collateral, and is
costly (both in terms of the cost of financing and the administrative cost for the process).
The total maximum value of the grant awarded by Enabel is One million eight hundred thousand euros (1.800.000 euros), which is equivalent to approximatively 2.026.510.192 Frw.
The funds granted by Enabel will serve to de-risk investments in the value chains and in reducing the barriers for investment to the value chain actors.
In this agreement, technical Assistance will be provided to improve the financial management and business skills of value chain actors. Participating Banks, MFIs and Saccos will also be provided with capacity building to improve their business knowledge of the supported value chains and to help them in better assessing credit applications from those respective sectors.
NIRDA will organize call for applications, through awareness campaign, workshops and media where eligible companies specifically operating in the pig, poultry, animal feeds value chains will be selected. All beneficiaries applying for loans will first be required to comply with the loan criteria of their respective bank, MFIs or Saccos. (End)