{"id":26268,"date":"2022-09-24T08:50:50","date_gmt":"2022-09-24T08:50:50","guid":{"rendered":"https:\/\/www.africa-press.net\/rwanda\/all-news\/bdf-to-stop-equity-investment-scheme-for-smes"},"modified":"2022-09-24T09:05:10","modified_gmt":"2022-09-24T09:05:10","slug":"bdf-to-stop-equity-investment-scheme-for-smes","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/rwanda\/economy\/bdf-to-stop-equity-investment-scheme-for-smes","title":{"rendered":"BDF to stop equity investment scheme for SMEs"},"content":{"rendered":"

Africa-Press – Rwanda. <\/strong><\/span>The Business Development Fund (BDF) management has announced that it is moving out of quasi equity investments into small, and medium enterprises (SMEs) as this form of financing was not performing well.<\/p>\n

It made the revelation on Thursday, September 22, while appearing before the Parliament\u2019s Public Accounts Committee (PAC) to respond to public finance management queries that were raised by the Auditor General (AG)\u2019s report for the financial year 2020-2021.<\/p>\n

Under quasi equity scheme, BDF was co-investing with the project owner in order to help startups get the required funds to run and grow their businesses \u2013 without the exigent collateral requirement.<\/p>\n

Normally, the financial institution is supposed to gradually exit from the projects as entrepreneurs get empowered, repay the amount they owe it, and fully run the ventures after they become successful.<\/p>\n

According to the AG\u2019s report, the fund invested over Rwf1.9 billion through quasi equity loans from 2012 to 2021, but over Rwf1.6 billion, equivalent to 85 per cent of the total, were not yet recovered.<\/p>\n

The Auditor General recommended the BDF management that it should make thorough assessment of businesses it wants to invest in and do due diligence to ensure that they will be profitable, so that their owners are able to pay back.<\/p>\n

Members of Parliament wanted to know the progress on this issue.<\/p>\n

BDF Chief Executive Officer, Vincent Munyeshyaka told lawmakers that the low loan recovery rate for this financing product was an issue, indicating that it has only recovered about Rwf54 million [more, since the AG made the inspection].<\/p>\n

\u201cQuasi equity means that BDF is also an investor in a project and has to follow up on the operations being done, and have a member in the board of directors of that entity. We failed to do that, because we cannot get workers to represent us in all entities where BDF put money,\u201d he said.<\/p>\n

Though BDF set reporting requirements to know the progress of the companies it ventured in, this was not effective. This is the case because they see that you are not following up on the business, Munyeshyaka said.<\/p>\n

\u201cThey report what they want…there are some who lie; they have been in business for five years, and when you ask them why they do not repay, they say they do not make profit,\u201d he said.<\/p>\n

\u201cWe are no longer putting money in this [quasi equity]. We have to recover the outstanding amount that was invested before,\u201d he said.<\/p>\n

Munyeshyaka told The New Times that BDF\u2019s quasi equity investments were made into areas including the hospitality industry, agribusiness, and health (clinics).<\/p>\n

\u201cWhat we want is to support people in their projects, and not intervene in their projects, because, first we do not get time for that,\u201d he said, expressing concern that there are cases where this type of investment was misused.<\/p>\n

\u201cWhat we are planning is to give them money [loan that they will pay back], and increase business advisory services,\u201d he said, citing project management, accounting, and cost-benefit analysis to ensure that their businesses are profitable.<\/p>\n

For More News And Analysis About Rwanda<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Rwanda. The Business Development Fund (BDF) management has announced that it is moving out of quasi equity investments into small, and medium enterprises (SMEs) as this form of financing was not performing well. It made the revelation on Thursday, September 22, while appearing before the Parliament\u2019s Public Accounts Committee (PAC) to respond to […]<\/p>\n","protected":false},"author":84,"featured_media":26267,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,15,28],"tags":[760,763,758],"class_list":["post-26268","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-homepage-english","tag-africa-press","tag-africa-press-rwanda","tag-rwanda"],"yoast_head":"\nBDF to stop equity investment scheme for SMEs - Rwanda<\/title>\n<meta name=\"description\" content=\"The Business Development Fund (BDF) management has announced that it is moving out of quasi equity investments into smal ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/rwanda\/economy\/bdf-to-stop-equity-investment-scheme-for-smes\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BDF to stop equity investment scheme for SMEs\" \/>\n<meta property=\"og:description\" content=\"The Business Development Fund (BDF) management has announced that it is moving out of quasi equity investments into smal ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/rwanda\/economy\/bdf-to-stop-equity-investment-scheme-for-smes\" \/>\n<meta property=\"og:site_name\" content=\"Rwanda\" \/>\n<meta property=\"article:published_time\" content=\"2022-09-24T08:50:50+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-09-24T09:05:10+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/rwanda\/sites\/23\/2022\/09\/postQueueImg_17-632ec82b48a9e.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"700\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/economy\/bdf-to-stop-equity-investment-scheme-for-smes#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/economy\/bdf-to-stop-equity-investment-scheme-for-smes\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"BDF to stop equity investment scheme for SMEs\",\"datePublished\":\"2022-09-24T08:50:50+00:00\",\"dateModified\":\"2022-09-24T09:05:10+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/economy\/bdf-to-stop-equity-investment-scheme-for-smes\"},\"wordCount\":526,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/economy\/bdf-to-stop-equity-investment-scheme-for-smes#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/rwanda\/sites\/23\/2022\/09\/postQueueImg_17-632ec82b48a9e.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Rwanda\",\"Rwanda\"],\"articleSection\":[\"all news\",\"Economy\",\"homepage-english\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/rwanda\/economy\/bdf-to-stop-equity-investment-scheme-for-smes#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/rwanda\/economy\/bdf-to-stop-equity-investment-scheme-for-smes\",\"url\":\"https:\/\/www.africa-press.net\/rwanda\/economy\/bdf-to-stop-equity-investment-scheme-for-smes\",\"name\":\"BDF to stop equity investment scheme for SMEs - 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