The World Bank's International Finance Corporation (IFC) has given Rwanda's I&M Bank a $10 million subordinate loan. The IFC has said that this is to help the bank increase its lending to small businesses in Rwanda.
Both financial organizations have stated that they hope this will boost economic growth in Rwanda as well as helping small businesses to create more jobs.
“We are delighted with the continued partnership between IFC and I&M Bank. We have built a solid SME portfolio, and by training our clients in financial skills' workshops, we have seen their businesses strengthen and grow. Thanks to IFC's support, we will explore new and evolving sectors like tourism, energy and agri-business, while continuing to exert considerable influence on existing businesses,” said Robin Bairstow, Chief Executive Officer at I&M Bank Rwanda.
I&M Bank is the oldest financial institution in Rwanda, and by promoting increased access to finance for underserved SMEs, I&M Bank is supporting the Government of Rwanda's Vision 2020, a strategy that aims to transform the country into a knowledge-based, middle-income country, and a regional technology and finance hub. Small businesses account for 98% of all businesses in Rwanda, and contribute more than half of its total gross domestic product. However, most lack sufficient access to finance, leading to an estimated $1.2 billion finance gap.
“Expanding SME financing, especially in developing economies where risks are higher, is an important pillar of IFC's strategy. This facility will allow I&M Bank to reach underserved SMEs in Rwanda, and have a significant impact on growth and job creation,” said Oumar Seydi, IFC Regional Director for Africa, said.
The IFC has said that its investment will focus on supporting small businesses operating in Rwanda's tourism, agriculture, and trade and commerce sectors. These sectors are reported to account for about half of Rwanda's gross domestic product, while agriculture generates 31,5%.