Commercial banks have scaled up their efforts to attract SMEs by promising to support their projects.

“Registering a business and beginning actual operations in Rwanda is the easy part. But, to acquire a loan to boost your business would need to go through difficulties that include a well professional bankable project to convince the lenders,” said Niyigena Abdul, a trader in Kigali.

Mr Niyigena started two businesses last year one for him and the other for his sister. Little did he know that, in six months, he would close his retail clothes shop to concentrate on running a small roadside kiosk with his sister.

He is one of the 97.8 per cent of the small and micro-entrepreneurs who have to overcome insurmountable odds to see their businesses flourishing in the country.

Mr Niyigena said he visited about four banks for a loan to boost his business before it closed, but failed due to poor bankable project.

“It is disturbing to approach an expert for assistance in drafting professional bankable projects and the cost is almost a half the loan pursued,” said Mr Niyigena.

“For an expert to draft one business plan it requires between Rwf300,000 and Rwf500,000 and some goes to about Rwf1 million,” said Niyigena Besides the business plan, which is the standard license for all businesses men requesting a loan from either commercial, microfinance or development banks a start-up may need reliable collateral security to be able to obtain the loan.

Lydie Nyombayire Murorunkwere, BPR’s Atlas Mara head of institutional banking, said the utilisation of export growth fund for local SMEs and other interested investors has been low, citing limited awareness and lack of technical capacity.

“We are working in partnership with BRD to help our customers to have well detailed and professional business plans for easy access to loans. Usually without a detailed business plan, collateral security it is hard for a commercial bank to offer a loan.”

“Businesses access the funding because they fulfilled the requirements, so without support to be able to draft good business projects that convince the lender to offer the loan, means zero loans,” said Ms Murorunkwere.