IFC Partners with BPR Bank Rwanda to Increase Access to Finance for Small Businesses

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Kigali, Rwanda, September 9, 2024 – To drive growth and development in Rwanda by widening access to finance for small and medium-sized businesses in the country, IFC today announced a financing package of up to $60 million in the equivalent of local currency funds to BPR Bank Rwanda Plc.

The package comprises up to 53.8 billion Rwandan francs, the equivalent of U.S. $40 million, from IFC's own account, and up to 26.9 billion Rwandan francs, the equivalent of U.S. $20 million, mobilized from other development finance institutions. The financing will allow BPR Bank Rwanda Plc, Rwanda's third largest bank by asset size, to expand access to credit to small- and medium-sized businesses (SMEs) in the country, especially those in sectors that bolster economic diversification, such manufacturing, agribusiness and services.

At least 25 percent of the funds will be specifically designated to support women-owned SMEs in Rwanda.  

The financing will support a vital but often under-served sector of Rwanda's economy. SMEs contribute about 55 percent of the country's Gross Domestic Product (GDP) and 60 percent of employment. However, SMEs have identified access to finance as the single largest obstacle to growth, with almost 31 percent of respondents in Rwanda to a 2019 World Bank survey describing it as a major growth constraint.

In addition, IFC will assist the bank to develop and incorporate sector-specific environmental and social processes into its credit review procedures and roll out environmental and social (E&S) risk management training to all staff members. This is anticipated to help bolster the bank's risk management practices and encourage sustainable development.

"This partnership with IFC is a testament to our unwavering commitment to supporting the growth of SMEs in Rwanda," said BPR Bank Managing Director, Patience Mutesi. "With this $40 million facility, we will enhance our ability to provide flexible and affordable financing solutions that will empower businesses to scale, innovate, and drive economic development."

"IFC is pleased to partner with BPR Bank Rwanda to help SMEs in the country access the financing they need to grow and create jobs," said Mary Porter Peschka, IFC's Regional Director for Eastern Africa. "As we partner to serve this important sector in the economy, keeping a special focus on supporting women-owned businesses, we can together unlock employment opportunities and drive inclusive growth in key sectors of the economy."    

Through its focus on supporting women-owned SMEs, IFC's loan to BPR Bank Rwanda has the potential to increase the employment of women in Rwanda and reduce the country's current gender employment gap. As compared with men, women in Rwanda face lower average employment rates of 11 percentage points, according to UN Women – a gap that persists across all education groups. 

With a tenor of seven years, this financing package is supported by the IDA20 Private Sector Window Local Currency Facility (LCF), which extends long-term loans in local currency to protect borrowers against currency fluctuations in countries with underdeveloped capital markets.

IFC's partnership with BPR Bank Rwanda builds on a longstanding relationship with the bank's parent company, KCB Group, which spans back to 1998. Over the past 26 years, IFC has committed several loan facilities and provided several advisory services to the group.

As of 31 July 2024, IFC had an $83 million investment portfolio and an advisory portfolio of $1.92 million in Rwanda. IFC's focus areas in the country include aims to improve human capital, bolster conditions for private sector development, increase access to infrastructure and the digital economy, and drive growth in the country's agricultural sector.

About IFC

IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2024, IFC committed a record $56 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a liveable planet. For more information, visit www.ifc.org.

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