Muhanga District authorities have revealed that only a handful of business plans submitted to various banks by local residents for loan approval have actually received funding.
Only 4 of the reported 20 approved business plans have been given the financial go-ahead, according to district officials.
The business plans in question were approved by the Ministry of Commerce and Industry through a business plan competition organized by the Ministry to boost Small and Micro Enterprises (SMEs).
The competition, after receiving positive reviews all around, then spawned a permanent program dubbed ‘Hanga Umurimo’, a Kinyarwanda handle loosely translating to, ‘create employment opportunities.’
The program is aimed primarily at talented individuals who have brilliant business ideas which are/can be profitable, but lack the funds to put their plans in action.
While it was initially thought that MINICOM would directly finance the approved business propositions, it was later established that certain banks would be the ones to provide financial coverage in the form of a loan, with the government providing insurance on the loan in the form of collateral in the event the business fails to accrue enough income.
Issues then arose from this as some banks are still reportedly hesitant to open their coffers and finance the business plans, despite them being granted approval by MINICOM. This issue is however being deliberated upon and should be resolved soon, according to District officials.
Harelimana Jean Bosco, charged with cooperatives in Muhanga District, was quoted as saying that there was “no reason whatsoever” that the banks refuse to grant funds for a business that has gotten government approval.
He however revealed that the prospective entrepreneurs must have at least 25% of the required starting capital for the business, with the government providing coverage for the remaining 75%, for 100% risk coverage of the loan.