Kigali, 26 June 2023 – Micro, Small, and Medium Enterprises (MSMEs) are the leading driver of economic transformation and job creation in Rwanda, constituting c. 97% of all businesses in the country. Today, on the first day of the EU - Rwanda Business Forum we are pleased to announce that I&M Bank Rwanda, the European Commission, the European Union Delegation and FMO have joined forces through a USD 10 million NASIRA Risk Sharing Facility that will help to further support the growth and development of the MSMEs in Rwanda.
Overview NASIRA program
FMO’s NASIRA risk sharing program takes the form of a loan portfolio guarantee and supports financial institutions in increasing their lending activities for MSMEs with a focus on underserved business segments, such as smallholder farmers, women-owned and youth-owned businesses, who often are unable to access financing due to a higher credit risk. FMO’s NASIRA program enables financial institutions to more confidently lend to these riskier client segments by sharing the possible credit losses with the financial institutions and thereby reducing the risks involved. In addition to the risk sharing facility, the NASIRA programme also includes technical assistance to support the financial institution with the tools to access and service these segments effectively, as well as a portfolio management tool to facilitate an automated monitoring process. The NASIRA risk sharing programme is implemented by FMO and supported by the European Commission and the Dutch Government.
Nasira and I&M Rwanda
FMO’s NASIRA loan portfolio guarantee will be supporting I&M Bank Rwanda to increase its lending to Rwandan MSMEs with a specific focus on smallholder farmers, youth, and women entrepreneurs who face the most challenges in accessing formal bank financing in Rwanda. Additionally, through the NASIRA programme, FMO will be supporting I&M Bank Rwanda with technical assistance to develop specific client value propositions for the smallholder farmer and women-owned MSME clients.
Belen Calvo Uyarra, Ambassador of the European Union to Rwanda: “We are excited to witness today the signing of the first guarantee line in Rwanda backed by the EFSD. I want to recognize the support of the Dutch Government, who contribute to the success of this truly ‘Team Europe’ approach. The fact that the signing is taking place during the EU-Rwanda Business Forum, with over 120 EU companies and financial institutions present, is very significant as it can serve as an inspirational example of how the European Commission, European Union member states, and the Rwandan financial sector can join together to support the development of Rwanda´s private sector. My main message is that this is only the beginning. The European Fund for Sustainable Development Plus will bring up to EUR 6 billion in guarantee capacity coverage to Sub-Saharan African private sector and we are sure that FMO and I&M’s signature today will set an example for other stakeholders to follow-suit and continue to support Rwanda’s vision through the Global Gateway initiative.’
Robin Bairstow, CEO of I&M Bank (Rwanda) Plc: "We are excited to announce our strategic partnership with FMO through the establishment of the NASIRA Portfolio Guarantee. This collaboration represents a deliberate move by I&M Bank Rwanda Plc to diversify our business and focus on developing the MSME sector. By joining forces, we have the opportunity to amplify our outreach and support to Micro, Small, and Medium Enterprises (MSMEs) in Rwanda. Together, we aim to unlock the potential of traditionally underserved segments, including women and youth borrowers. This partnership not only strengthens our position as the leading financial partner for growth but also aligns perfectly with our strategy, reinforcing our commitment to providing sector-specific customer value propositions. With the NASIRA Guarantee, we are confident that we can drive the growth and success of MSMEs in Rwanda, driving economic development and creating opportunities for the future."
Huib-Jan de Ruijter, Co-Chief Investment Officer at FMO: “We are delighted to have this opportunity to support MSMEs in Rwanda. The NASIRA facility represents a new approach to unlocking support for underserved groups, and we express our gratitude to I&M Bank Rwanda for their commitment to the MSME segment. We would also like to extend our appreciation to the European Commission in making this guarantee facility possible. Together, we look forward to making a positive impact and fostering the growth and success of these individuals and their businesses."
NASIRA is an innovative financial programme that supports young, female, and migrant entrepreneurs in Sub-Saharan Africa and countries neighboring Europe. As of April 2020, the scope is widened to also reach small COVID-19 affected entrepreneurs in the same regions. NASIRA uses guarantees to allow local banks to on-lend to underserved entrepreneurs. The goal is to allow local banks to provide loans to groups they normally perceive as too risky. By so-called ‘risk-sharing’ NASIRA reduces the perceived and real risks of lending to vulnerable and underserved parts of the population. The NASIRA guarantee is part of the EU External Investment Plan, which, by investing €5.1 billion in EU funds, is set to leverage more than €50 billion in total investment from the public and private sector. It will enable small business owners to access affordable loans through local banks, microfinance institutions and other non-banking financial institutions. For more information, please visit: http://www.nasira.info/
About European Fund for Sustainable Development Plus
The European Fund for Sustainable Development (EFSD), is currently succeeded by the EFSD+ which is part of the EU’s investment framework for external action. It ensures world-wide coverage for blending, guarantees and other financial operations. The EFSD+ is the main financial tool to mobilise investments under Global Gateway – the EU strategy to narrow the global investment gap in infrastructure. The tool will raise up to €135 billion worth of investments in a variety of Global Gateway sectors. It is an innovative instrument that helps generate investment through guarantee capacity and blending grants.
Incorporated in 1963, I&M Bank (Rwanda) Plc is the oldest Bank in Rwanda. It is today one of the leading players in the industry with a strong footprint across the country. I&M Bank Rwanda offers the full range of personal, business, institutional and corporate banking products throughout its locations. The Bank has been listed on the Rwanda Stock Exchange since March 2017. The Bank is a subsidiary of I&M Group PLC, a leading regional financial services group in Eastern Africa with a presence in Kenya, Tanzania, and Uganda as well as a joint venture in Mauritius. I&M Group has a long history in banking and has established a wide network of correspondent banks across the globe and enjoys a strong relationship with leading international Development Financial Institutions.