ECONOMIC GROWTH AND PROSPERITY IN THE HANDS OF WOMEN ENTREPRENEURS
THE CASE OF RWANDA
Sheenah Kaliisa –London 5th July 2011
Rwanda’s dream of becoming a middle income country by 2020 rests in the hands of women. The small East African country has gone through much internal strife including war, but it is now rebuilding its communities with a strong impetus through women economic empowerment Rwanda’s women constitute more than half of the population, and fifty percent of parliamentarians are women. So if the country is to achieve the economic empowerment it desires, then women have to not only be at the forefront of the political landscape, but they have to also lead in the economic development of the country. Claire Akamanzi, the Chief Operating Officer of the Rwanda Development Board [RDB], tells the World Entrepreneur Society (WES) how they are assisting women entrepreneurs. “The RDB was aimed at fast tracking Rwanda’s drive to economic development. It was set up three years ago to drive women empowerment”. The government merged eight institutions, for example, tourism, ICT bodies, investment promotion agency and many others. This forms part of the WES, “MD’s Speak Out Series”.
RADICAL REFORMS EQUALS RESULTS
RDB has driven one of the most radical reforms in Africa which has seen Rwanda recognised as the 2nd most reformed country in the world next to Georgia. “Three years ago, if you wanted to start a company in Rwanda, you would go through sixteen procedures which would take you two weeks. Today, if you are starting a business, it will take you one procedure and one day” says the Akamanzi. The World Bank has now named Rwanda the 9th easiest place to start a business in the world. More than 90 percent of the businesses in Rwanda are Small and Medium sized Enterprises (SMEs). There is an estimated 70,000 SMEs in Rwanda, which contribute more than 10% of the economy, “if we support SMEs and they grow, they can support the economy much more and if we double that 10 percent, our economy will double” said Akamanzi. So what constitutes an SME in Rwanda, since the definition may vary from country to country? “One of the things that the new SME strategy that was passed last year looks at is how we need to harmonise how we define an SME. In our new strategy we are going to have a definition that includes both turnover and number of people involved in the businesses’. However SMEs at times lack clear focus and ultimately it becomes an uphill struggle. “SMEs have all sorts of issues, first of all understanding their vision. Secondly many of them don’t even know any management practice basic questions like how do I run a business with proper management?
Sometimes their [businesses] are too sophisticated for them, so we try not to overwhelm them - depending on which SME we are working with. The other major issue is accounting; they can’t tell if the business is profitable or not because they don’t keep any records - until they become bankrupt. So we have programmes to teach them how to keep books of accounts and we have a partnership with Chairman Michael Schneider of the company Kingston Smith. They’ve trained about 182 SMEs so far on accounting because that’s their area of expertise. So we get such strategic partnerships to support us in our SME development work” adds Akamanzi. Last week, the Rwanda Development Bank (BRD) also announced a guarantee package to rescue SMEs, which are increasingly desperate for more financing alternatives. The Rwandan Franc 7.8 billion guarantee in the form of grants and funds will help SMEs access financial facilities from commercial banks. In a related development a $9.7 million fund supporting SME’s was unveiled. The Fund is aimed at making equity investments of between $50,000 and $1 million in medium enterprises, and this is largely targeted to benefit women. The Fund shareholders include Rwanda Enterprise Investment Company (REIC), International Finance Corporation (IFC), the Business Partners International (BPI).
WOMEN START OFF SMALL
In Rwanda, the smaller a business, the more likely it is owned by a woman, ‘You find that women are half of everything we do, especially when it comes to small businesses, they are the market traders, shop owners, most of them will be women. There are two other areas that are predominantly women, agriculture, arts and crafts. We specifically target those areas because the people in that business are predominantly women’ added Akamanzi. However, women desperately need business skills and financial support. Akamanzi said “When it comes to support we help them to write a business plan in such a way that the banks can easily finance it and then we monitor how many of those we have supported have actually gotten the financing. In addition to that government has just set up a government development fund in the development bank of Rwanda, eventually what that fund would be doing is to give guarantees because banks fear lending to an SME that doesn’t have collateral and therefore doesn’t have a lot of financial back up. That is something that is coming up this year in order for us to deliver. We have set up offices in all the 30 districts of Rwanda”. Akamanzi added that business women are assisted in marketing but the crucial area is financing; “knowing how to raise financing and understanding that they don’t have to have equity, knowing that they can actually expand by tapping into the financial system’.
Last week sixty businesswomen began a four-day training organised by RDB in partnerships with the International Trade Centre (ITC) and Canadian International Development Agency (CIDA) aimed at strengthening capacity to access foreign markets and improving the quality of products. The training targeted women mainly in the business of coffee, leather, horticulture, handicrafts and services provision. According to RDB, the training contains four components, including an export training course, business counselling, markets information and business advertising on the internet. So the questions of the week are; How great a role should government play in assisting SMEs and women? Is the empowerment of women entrepreneurs the answer to raising the standard of living in your country? Have your say…..