African Governments Support SME Financing

The access to financing has always been a herculean task for African SMEs, whereas they possess a great potential to play an important role in the fight against unemployment and poverty. The issue of guarantee as well as the risk related to their lack of experience are the major reasons banks evoke to justify their refusal to grant them loans. However, some governments are gradually acknowledging that development cannot be done without SMEs.

In an interview with Ecofin agency, the Youth and ITC Rwandan Minister, Jean Philbert Nsengimana, (pictured above) announced the following:

“We are working to provide a dedicated fund of 100 million dollars to solve the difficult access to loans for ITC young companies. Generally, banks do not include/understand the type of risk one actually has to take with start-ups.  There are other types of financing such as Angels Investors, which we want to set up with a certain number of financial institutions and with the support of our national Agency of development promotion.  We hope to make this fund available soon“, he explainedHowever, while waiting,” Jean Philbert Nsengimana specifies, “there are a certain number of accelerators and initiatives aiming to take young people’s ideas on a prototype scale to bring them to a market scale, offering a certain number of services like mentoring, connection to the market and financing on a small scale.  We are consolidating this system.” 

The Cameroonian government also opened in July, this year, the Cameroonian Bank for SMEs, following the promise made by the Head of State during the Agro-pastoral Meeting in 2011.  Added to that, the presence of Ovamba, a global platform operating in Cameroon which specializes in SME finance, makes funds available fast for credit worthy businesses. Ovamba’s speed in cash provision renders their platform unique and different from traditional banks.

Source: http://www.agenceecofin.com/investissement/0709-32134-le-rwanda-va-mettre-sur-pied-un-fonds-de-100-millions-de-dollars-pour-financer-les-jeunes-innovateurs