Rwf400million Credit Fund launched to support Agriculture SMEs in Africa

By Elias Hakizimana.

African Agribusiness Academy (AAA) launched on September 20, 2018 an agriculture support-small credit fund worth €400,000 that is equivalent to Rwf 400 million.

The fund is dedicated for three countries namely Uganda, Kenya and Rwanda of which Rwanda takes a part of €100,000, equivalent to Rwf100 million for the pilot phase.

The fund board is in the Netherlands and is ready to start serving SMEs. The money will be on SMEs account from the day of its inauguration until the end of October when they start applying for it.

The launch has occurred amid the AAA Annual General Meeting 2018 that was hosted by Rwanda’s African Agribusiness Academy.

Jean Claude Ruzibiza, AAA Rwanda Chairman said that this fund is an intervention that comes on time to sustain Rwanda’s Agribusiness Companies.

Speaking at the official launch, Farid karama, executive Director of AAA explained that the fund is a milestone to boost Small and Medium Enterprises in Agriculture and Livestock with capacity to grow into viable businesses and benefit small holder farmers.

Farid Karama, Second from Left-Right with Jean Claude Ruzibiza on his right addressing the AAA members during the general meeting.

“The value of the fund is 400,000 euros that is for the three countries: Uganda, Kenya and Rwanda; and particularly for Rwanda it comes to around 100,000 euros for the pilot phase, after that we hope to get more money coming into the fund. So, it is a milestone because if you go to any country in Africa, be it Rwanda, be it Uganda, be it Kenya, the challenge companies are facing is money, and most of the banks do not understand agriculture,” Karama said.

“This is an opportunity also which the fund has come up with, we understand agribusiness, we know what the challenges are and with this fund there, the members are going to grow their businesses,” he added.

Farid Karama, Second from Left-Right with Jean Claude Ruzibiza on his right addressing the AAA members during the general meeting.

He said that the fund will not work as a bank as it will be as a unique fund which members should use to grow their businesses.

He said that they will look at how this fund is going to work in a way that benefit also small holder farmers.

“This fund is for SMEs, and these ones must of course work with smallholder farmers. If they realize there is an effect that goes to small holder farmers, they will intervene. If we give money to the company, the company is going to buy more from the small holder farmer using that money, so there is always an impact from one to another, the company is benefiting and a small holder farmer is benefiting because SMEs are equipped to buy raw materials from the farmer,” Karama

 No collateral required

Karama explained that no AAA member is required to pay warranty fees to apply for a loan from this fund.

“As AAA we are a family, we have trust in ourselves and members can also believe in the fund, that is most important thing. The fund also has to come back and help other people to benefit from it, it is not a-one-man thing, it is for the family. We are using that policy of trust,”

Application criteria

At least 15 criteria are required for the loan applicant, including being an active member of his/her Business Club for at least two years, having paid up the membership fees, having a proven track record in cooperating with smallholder farmers, having a business with a good growth potential, with a business that is at cash flow break-even or positive cash flow level, who can clearly demonstrate and underpin the purpose of the finance,….

More criteria include being unable to attract this finance from other sources (on reasonable terms), AAA member of the chapters with a turnover of less than $500,000, not require collateral, no fees will be charged since cost will be kept under control and  managed by the members, the fund will only require a simple application, having the maturity of maximum one year.

The security comes from endorsement by two other members and they will sign off on all loan documents, the loan can be used for various purposes, such as working capital, investments, etc.

The interest during the pilot phase is fixed at 15 percent for Rwanda. The applicant should also present a bankable business plan.

SMEs welcome the fund

Saidi Havugimana, founder of HAJI Enterprise in Nyanza District that process and sell milk said that they are expecting many impacts from the fund.

“We have been waiting from such a credit fund since a long ago and as entrepreneurs in Agribusiness we should have establish a networking funding system to empower ourselves, we thank very much the Netherlands sponsors to think on capacitating us to start, improve and advance our activities and we hope achieve more,” Havugimana stated.




3,051 total views, 1 views today

Spread this story

Elias Hakizimana

Elias Hakizimana, CEO&Founder of The Inspirer Ltd,( is a professional Rwandan Journalist with Bachelor’s Degree in Journalism and Communication, received from University of Rwanda’s College of Arts and Social Sciences (CASS) in 2014. He served various media houses in Rwanda including Rwanda Broadcasting Agency (RBA) in 2013 and became passionate with English Online and Print Media Publications where he exercised his talent as a Freelance News Reporter for The New Times, The Independent, The Rwanda Focus, Panorama and more before he became a Self-Entrepreneur as the CEO and Founder of The Inspirer Limited in early 2017.

Leave a Reply

Your email address will not be published. Required fields are marked *