Two American investors have invested over $2 billion in Rwandato save thousands of local enterprises struggling to access capital at even a higher interest rate.
Working through a locally registered company Kountable, the Americans have been providing funding to multiple businesses including suppliers who need service their contracts or won tenders.
For example, when a local company successfully wins a tender to supply items, it will approach Kountable and secure quick funding at an interest rate as low as 2% compared to 20% interest rates from local banks.
Once the local company delivers the items to their client and gets paid, the local company will have to pay back to Kountable.
“We mobilize American companies to lend us money after explaining the good environment of business inRwanda,” Chris Hale, Kountable co-founder and Chief Executive Officer, told KT Press.
Kountable, worth 2 trillion, is targeting other established and well-networked entrepreneurs in emerging economies across the world.
“We were looking to start this global venture in a corrupt free country. Rwanda is,” says Hale.
Hale noted that, “With very dedicated and dynamic small and medium enterprises,Rwanda is a fast developing country in Africa.” They have registered 100 deals seeking support, since August 2014.
Among these, 17 deals worth Rwf 1.1 billion ($ 1.6 million) were concluded. They included supply of health, manufacturing and ICT equipment.
Rwanda‘s trade and industry Minister Francois Kanimba, told KT Press, “Kountable operations show it is a very good project.”
To obtain funding, one needs to score between 500 and 1000 in social capitals, meaning networks and influence that enable a business to successfully run the business.
Kountable even investigates the business via social networks such as Facebook and Tweeter.
In March, a Rwandan company, Cyusa Digital Agency (CYUDA) won a tender worth Rwf 90 million to print 35,000 health insurance smart cards for University of Rwanda.
CYUDA later approached Kountable for funding and secured Rwf 4.8 million, including printing machines and papers.
“This created confidence amongst Rwandan SMEs. We can now bid in tenders involving huge amount of money without worry of collaterals and high interest rates on credit from our banks,” says Leandre Cyusa, the proprietor of CYUDA.