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Financial Products & Programs Helping small businesses to start, grow & succeed

Financial Products & Programs Helping small businesses to start, grow & succeed

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Page 1: Financial Products & Programs Helping small businesses to start, grow & succeed

Financial Products & Programs

Helping small businesses to start, grow & succeed

Page 2: Financial Products & Programs Helping small businesses to start, grow & succeed

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Business linesAbout BDF

Apr 21, 2023

Started in September 2011

Has a total of 114 staff – 95% are youth

BDS and Financial Services – Private Equity and Venture Capital

Page 3: Financial Products & Programs Helping small businesses to start, grow & succeed

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Business lines4 Financial Products

Guarantees

Grants

SACCO Refinancing

Quasi Equity Finance

Credit Guarantees for liability of promising SMES to Lenders

Aim to encourage SMES & lenders to invest in specific sectors

Provide subsidized loans to SACCOs For refinancing

Provide a flexible hybrid financing product designed to address the individual needs of SMEs

Apr 21, 2023

Page 4: Financial Products & Programs Helping small businesses to start, grow & succeed

1. Guarantee Program

Types of guarantees:

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Guarantees for fixed Assets/ Investment loans Guarantees for working capital loans Solidarity Guarantees

Apr 21, 2023

Page 5: Financial Products & Programs Helping small businesses to start, grow & succeed

Guarantees for fixed Assets

Eligibility: • All MSMEs, individuals, associations, coops & Cos.Categories of Investments:• All sectors of investment that last over 1 year• Property, plant, equipment, land, buildings, motor

vehicles, furniture, fixtures, livestock, cottage industries, refrigerators

Maturity: Maximum to 10 years Risk Coverage• 50% - 75% range of total risk on investment loansGuaranteed Amount:• Limited to Rwf 500 m in agriculture• Limited to Rwf 300 m in all other sectors (Non- Agri.)

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Key features

Apr 21, 2023

Page 6: Financial Products & Programs Helping small businesses to start, grow & succeed

Guarantees for working capital

Eligibility: • All MSMEs, individuals, associations, coops & Cos.Categories of Investments:• All sectors of investment lasting less than 1 year• Short term agric. Campaigns, trading & commerceMaturity: Maximum to 1 year for Agric. Campaign

Maximum to 3 years for trading MSMEsRisk Coverage• 30% of total risk for ST agric. Campaign• 50% of risk for trading MSMEsGuaranteed Amount:• Limited to Rwf 500 m in agriculture campaign• Limited to Rwf 2.5 m for working capital loans

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Key features

Apr 21, 2023

Page 7: Financial Products & Programs Helping small businesses to start, grow & succeed

Export Guarantee Facility

Products :

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• Pre-shipment Credit Guarantee.

• Export Production Credit Guarantee

• Post-shipment Credit Guarantee

• Export Performance Guarantee.

Page 8: Financial Products & Programs Helping small businesses to start, grow & succeed

Cont’ of products Pre-shipment credit guarantee: This facility supports an

exporter for purchasing, manufacturing, processing and packing of goods meant for export against a letter of Credit/Confirmed/firm Order.

Post-shipment Credit Guarantee: This facility supports an exporter to enable him receive advances against expected export proceeds for continuity of export transactions and replenishment of working capital.

Export Production Credit Guarantee: This facility supports exporters pre-shipment stage to a supplier/producer/manufacturer of goods against firm contract or agreement of sale with an exporter.

Export Performance Credit Guarantee: This Facility to covers loss in connection with the financial institutions issuance of Bid Bond, Performance Bonds, Advance Payment Bonds and guarantees in lieu of retention of money

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Page 9: Financial Products & Programs Helping small businesses to start, grow & succeed

Eligibility Requirements

• Eligibility for PFIs

• Be fully licensed by the Central Bank;• Demonstrate commitment to excellence and a good

understanding of BDF’s requirements;• Provide dedicated staff to specialize in BDF financial access

programs;• Sound financial competence and position with continuing good

character and reputation;• Be granting credit facilities to exporters relating to export

production or pre-shipment, or post shipment of exports of goods and services, priority being given to high value and value added exports from Rwanda.

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Key features

Apr 21, 2023

Page 10: Financial Products & Programs Helping small businesses to start, grow & succeed

Cont’ Eligibility Requirements

• Eligibility for Borrowers • Registered Rwandan engaged in production and export of

goods and services from Rwanda ;

• Own viable commercial projects

• Has applied for a credit facility from a financial institution relating to export production or pre-shipment or post shipment finance on which the financial institution has sought a guarantee cover from the Fund.

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Key features

Apr 21, 2023

Page 11: Financial Products & Programs Helping small businesses to start, grow & succeed

Cont’ Eligibility Requirements

• Eligibility for Credit Facilities and Products

• Advances granted against firm export orders;

• Advances granted to supplier/producer/manufacturer of goods against firm contract or agreement of sale with an exporter;

• Advances granted in respect of deemed export

transactions;

• Eligible products are Rwandan exports of goods and services, priority being given to high value and value added exports

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Key features

Apr 21, 2023

Page 12: Financial Products & Programs Helping small businesses to start, grow & succeed

Scope of the Guarantee

• Risk Coverage

•Pre-shipment Credit Guarantee. 75%•Export Production Credit Guarantee 75%• Post-shipment Credit Guarantee 75%• Export Performance Guarantee 75%

•Note: Amount not exceeding Rwf 500M for Agribusiness projects and Rwf 300M for Non Agribusiness projects

•Duration

•Pre-shipment Credit Guarantee. 270 days•Export Production Credit Guarantee 270 days or *•Post-shipment Credit Guarantee 60 days•Export Performance Guarantee 270 days

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Key features

Apr 21, 2023

Page 13: Financial Products & Programs Helping small businesses to start, grow & succeed

Cont’ Scope of the Guarantee

Guarantee Fees

•Pre-shipment Credit Guarantee. 1%•Export Production Credit Guarantee 1.5%•Post-shipment Credit Guarantee 0.75%•Export Performance Guarantee 0.75%

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Key features

Apr 21, 2023

Page 14: Financial Products & Programs Helping small businesses to start, grow & succeed

Credit Guarantee on Construction Materials

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• Swiss Agency for Development and Cooperation and its implementing Agency called Skat Consulting Rwanda Ltd, are rolling out the credit guarantee fund that facilitate SMEs who are in construction material(Bricks and Tiles ) to get access to credits through BDF as Fund Manager.

• The overall objective is to the project is to minimise the impact of building material production on the Environment while improving the livelihoods and working conditions in construction sector.

Page 15: Financial Products & Programs Helping small businesses to start, grow & succeed

Eligibility Requirements

• Recommendation from Skat Consulting Rwanda Ltd

• Viable business plans approved by PFIs that deal in construction materials( bricks and tiles)

• Credit amount is limited to Rwf 20,000,000 per individual, company or cooperative

• 50% of Risk Coverage

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Key features

Apr 21, 2023

Page 16: Financial Products & Programs Helping small businesses to start, grow & succeed

Challenges

• Youth Mentality

• M&E

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Page 17: Financial Products & Programs Helping small businesses to start, grow & succeed

THANK YOU