In 2011, the appetite for Rwanda’s quest to create jobs for its citizens increased. Government looked for new approaches that would drive the current target to create 1.5 million off-farm jobs by 2024.
Business Development Fund (BDF) was born – to facilitate thousands of Small and Medium Enterprises as well as start-ups.
Ten years down the road, the fund released its decade-long numbers including entire investments into the job creation and the impact they have had on the labour market.
Roughly, the fund invested Rwf95 billion ($100.133 million) to support 41, 716 projects which created 180,000 jobs in the past 10 years, according to Innocent Burindi – the Fund’s Chief Executive Officer.
However, despite the achievements registered, the public fund grapples with biting Non Performing Loan (NPL) portfolio which currently stands at 12% – way above the rate in Micro-Finance Institutions and Banks.
The 12% NPL rate equates to 6000 stalled projects during the period ended December 31, 2019.
According to Central Bank figures, Non-Performing Loans (NPLs) remained stable in Banks and dropped in MFIs between March 2018 and March 2019.
In banks, the NPLs ratio remained stable at 6.8 percent in March 2018 and March 2019, but in the MFI sector it dropped from 8.8 percent to 7.2 percent.
This means that BDF’s 12% NPL rate almost double that of MFIs and Banks.
“We have set strict measures including self-evaluation and monitoring within the fund to deal with the issue,” Burindi said during a media briefing on the Fund’s 2019 performance.
Under its mandate to promote business development and job creation in the country, Burindi said that more focus is always put in promoting the economic welfare of Rwandans.
In 2019, the fund spent Rwf14.9 billion to support 3,009 projects – registering a growth of 44%. Burindi told KT Press that the Fund will support 4,940 projects this year at a cost of Rwf14.4 billion.