Rwanda is known for capitalizing on home grown solutions that have seen the country spur its development in the last twenty years after the 1994 genocide.
Just like the One cow per family-commonly known as ‘Girinka Munyarwanda’ program –which has a logic of communities sharing cows among families, The City of Kigali administration has adopted the idea of starting a new program that will see communities help individuals to start small businesses.
The new business program, dubbed-‘Girubucuruzi’- literally meaning ‘Start a business’ was on February 26, 2014; aimed at enabling individuals especially those that lack capital, to get finance to start-up a business.
The first pilot program was launched in Muhima sector, in Kigali city and the same initiative will be spread throughout the other sectors in the three districts that make up the city of Kigali. The same program will be disseminated throughout the country.
How it works
Members of the community will be obliged to pool funds in a separate Community fund that will be managed by the Sector savings and credit scheme (Umurenge sacco). Individuals and groups will be able to apply for funding-of at least 500.000 (individual) and Rwf2million for a group.
Community members will apply for loans with written business projects which will have to be approved from the cell level to the sector level and the Umurenge sacco will provide funds from the money that will have been collected.
While the Umurenge Sacco’s charge a 24 percent interest on loans annually, this new initiative will charge an interest as low as 5 percent annually- making it easy for residents to repay the loans- with a possible grace period of six months.
The funds and financial paper work and follow up will be managed by the Umurenge Sacco committee charged with managing the community fund, which will be separate from the usual operations of the Umurenge Sacco.
While launching the program City Mayor, Fidel Ndayisaba said that Muhima sector was chosen as the first benefactor of this program because of its outstanding business community and the commitment of local leaders to push for community development.
He said that the success of this program will be an addition to the already existing initiatives, speared headed by President Paul Kagame- to see the country develop and transformed towards self sustainability.
“This program has the same notion like other home grown initiatives, such as Girinka- which was started by President Paul Kagame. We (government) will support the community to ensure that individuals are helped to start business so as to earn a decent living as foreseen in the countries vision 2020” Ndayisaba said.
The Mayor called on residents to support the initiative so as to enable other members of the community to access easy financial support that will see most of the poor residents get involved in business and earn a living.
At the forefront, residents of Muhima sector collected over Rwf2millions in pledges to the community fund. So far eight individuals have applied for the loans and will soon get financed once their projects are approved by the sector committee.
According to Francine Havugimana, the Chairperson of Girubucuruzi committee, in Muhima sector, the funds will focus on the very vulnerable of the community including the handicapped and youths, to enable them to start businesses.
Havugimana also revealed that the sector is negotiating possibilities to work closely with telecom companies and other development partners in the sector, to assist in the training and capacity building of individuals and groups of residents interested in benefiting from the program.