Following a successful annual training of a big number of Small and Medium Enterprises (SMEs) in Rwanda by the Commercial Bank of Rwanda (BCR) with support from the Germany Development Cooperation (GIZ), all the past beneficiary businesses will be eligible for a competition being organized by the bank, due for next month—confirmed Mr. Sanjeev Anand, BCR’s Managing Director.
Both institutions are supplementing Government efforts of empowering SMEs to do competitive business—so they can grow to become major contributors to the country’s economic development.
Since the start of this project, Mr. Sanjeev says leaders of 50 SMEs are trained on a quarterly basis and the bank targets to train about 200 (SMEs) by end of this year.
“We train different types of SMEs, which also necessitates diversity in terms training areas. We train them on among other things; financial management, material handling, project management, human resource etc”, he said.
An international business training consultancy firm has been hired to conduct the training. Sanjeev too offers training on basic financial management and banking skills.
At the end of each training course, the BCR boss explains that evaluation is done and results are impressive—“between good and excellent”. “In fact, many want to come back for more training”.
He said winners of the competition will be awarded with study trips to either Kenya or South Africa. A panel of independent judges will be engaged to select the best SMEs.
Rwanda’s private sector is dominated by SMEs, reportedly over 80 per cent according to the 2010 Business Establishment Survey by the National Institute of Statistics of Rwanda.
But as Eric Kacou observes in his recent book on Entrepreneurship, majority of these SMEs struggle at the Bottom of the Pyramid—in what he calls “Survival Trap”—because majority lack basic business management skills. Over the last couple of years, banks have been very skeptical about lending to SMEs because of high credit risk associated with them—over 60 percent close shop before they even celebrate their first anniversary according to a Private Sector Federation (PSF) research done last year.
BCR believes that if SMEs are empowered, everybody is a winner. “As banks, we’re winners too because it will improve our loan portfolio…as it opens up new lending markets. Also, growth of SMEs will definitely expand Rwanda’s tax base as envisioned in the Government’s SMEs Development Policy and Strategy”.
