The bank of Kigali has signed a Rwf 60 billion deal with the European Investment Bank, the long-term lending institution of the European Union, to support small and medium enterprises.

The European Investment Bank will provide Rwf30 billion in credit, while the Bank of Kigali will match the amount.

"The new Rwf 60 billion deal will ensure that Rwandan companies build on their strengths and contribute to sustainable economic development in Africa," said the vice president of the European Investment Bank, Ambroise Fayolle.

Bank of Kigali chief executive Diane Karusisi said that the Rwf60 billion will address the need for affordable and long-term financing for the private sector.

"We have found the right partner in European Investment Bank to ensure that financing is not a bottleneck to creating a vibrant private sector in Rwanda," said Dr Karusisi.

The deal was signed this past week on the sidelines of the Africa CEO Forum. The credit line has a maturity period of seven years, and will attract an interest rate of four per cent to five per cent.

Commercial banks charge an average 10 per cent on loan.

The European Investment Bank has provided RWF 63 billion to private sector investment in Rwanda in co-operation with the Bank of Kigali since 2009.

Previous engagement has helped to create an estimated 760 new jobs.