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Expansion of Successful SME Finance Models

Effective financial services are a basic requirement for successful business development and the promotion of economic growth. In East Africa, Swisscontact is helping to develop functional and stable financial systems by replicating successful models from other projects.

There is significant demand for financial services in East Africa, particularly in rural areas. Until now, the formal banking system has not been able to meet this demand - not even with basic services such as secure savings and short-term credit. Among the financial services rural small and medium enterprises (SMEs) such as smallholder farmers require, are commercial capital, credit, savings mechanisms, retirement savings products, insurance and money transfers.

Microleasing
Since 2015, Swisscontact has been implementing a microleasing project - financed by Credit Suisse - in Rwanda. The objective is to improve access for disadvantaged populations by ensuring that smallholder farmers and SMEs are able to afford essential elements of production, including livestock, water pumps, or beehives. Another vital aspect is ensuring that local microleasing agents are sustainable, and offer affordable services. Before implementation in Rwanda, microleasing had been tested and successfully established in Kenya, Uganda, and Tanzania.

The project provides technical support to our partners in Rwanda. This includes development of functional payment mechanisms and improvement of service providers’ marketing abilities. In this way, SMEs are informed of the benefits of microleasing and demand thereby increases. During the current pilot phase, the project is expected to assist 1,500 farmers to purchase fixed assets, while building the capacity of two savings and credit cooperatives and one microfinance institute.

 

Fanikisha+
Swisscontact is supporting the local Equity Bank affiliate to support woman-owned small businesses in Rwanda. It achieves this by providing training in financial skills as well as mentoring and coaching, in order to improve the business skills and availability of financial services tailored to clients’ individual needs. In this way, we are facilitating the successful implementation of concrete business ideas. The project is supported by the Swiss Capacity Building Facility (SCBF) and is called Faniksha+ (in Swahili, Fanaka means “success”). It includes financial services such as group and individual credit for new or existing businesses that are on track to expand.

Kenya Rwanda Tanzania Uganda News Finance