Rwanda approved an additional Rwf118 billion in financing from the World Bank to help businesses access affordable loans, meet operating costs and expand their activities, particularly small and medium-sized enterprises facing difficulties securing credit.
The $80 million financing agreement, provided through the World Bank’s International Development Association (IDA), was ratified under Law No. 052/2026 of October 9, published in the Official Gazette on October 15.
The funding will support the Access to Finance for Recovery and Resilience Project, which was launched in 2021 to help businesses recover from the economic effects of the Covid-19 pandemic.
The additional financing is intended to maintain and expand access to credit for businesses struggling with limited working capital, investment financing and other financial constraints.
Finance and Economic Planning Minister Yusuf Murangwa told the Chamber of Deputies that demand for affordable business financing remained high, with more eligible enterprises continuing to seek support.
“The project has helped many businesses, but we continue to receive applications from businesses that meet the requirements and need additional financing to access affordable loans,” Murangwa told the Chamber of Deputies .
He explained that the government had sought further financing from IDA to respond to that demand.
The agreement provides $31.5 million for working capital and investment loans, which will be made available through direct lending and participating financial institutions.
The money is intended to help businesses cover operating expenses, purchase equipment and other assets, and finance expansion.
Micro and small enterprises will also be able to access credit through participating microfinance institutions to address short-term financial needs.
Another $14 million will support a partial credit guarantee facility aimed at helping small and medium-sized enterprises obtain loans.
The facility is designed to reduce the risks faced by financial institutions when lending to businesses that may struggle to meet conventional borrowing requirements.
By covering part of the lending risk, the arrangement is expected to encourage banks and other financial institutions to extend more credit to eligible enterprises.
A further $3 million has been allocated to a bridge-lending facility intended to assist vulnerable businesses experiencing temporary financial difficulties.
The facility will help eligible enterprises manage debt repayments when their operations are disrupted by shocks, including floods, droughts and other events that affect their ability to generate income.
Meanwhile, $30 million will support a junior credit enhancement facility designed to attract additional private investment into business financing.
The arrangement will strengthen the Development Bank of Rwanda’s (BRD) capacity to raise funds, including through sustainability-linked bonds, and make more financing available to businesses.
The World Bank’s project documents indicate that the additional $80 million will restore resources redirected from the programme to other projects in 2024.
The funding will therefore replenish existing financing facilities rather than establish an entirely new business support programme.
BRD will oversee implementation of the project’s financing components, working with participating financial institutions to reach eligible businesses.
Beyond lending, the programme will provide technical assistance and business development services to help enterprises improve financial management, strengthen operations and prepare for future investment.
It will also support training, institutional capacity-building and monitoring to improve the delivery of financing services.
According to Murangwa, the government’s financing agreement with IDA provides for repayment over 40 years, including an 11-year grace period, with no interest.
However, these terms apply to the government’s borrowing arrangement with IDA and do not mean that businesses receiving loans through the programme will automatically qualify for interest-free credit.
Individual businesses will still be required to meet the eligibility criteria and lending conditions established by participating financial institutions.
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