Category: Business

Soon activities at MAGERWA and branches will be much quicker than before. This follows announcement by the new investor Larry lam, chairman of Portek a Singapore operator of medium sized containers and multipurpose ports.

Portek now owns 66% shares of MAGERWA and it will be in charge of the day to day activities of the once public bonded warehouse. Lam noted that much effort would be put in ensuring better customer care, better service delivery and reducing congestion at the warehouse.

The Singapore based company will also construct several dry and seaports at the two largest ports in the region situated at Mombasa and Dares salaam.

“We intend to buy several lands closer to the ports at which goods from Rwanda and region would be offloaded. Currently, the two major ports are holding more than their capacity a fact that delays activities,” he remarked.

In Rwanda more storehouses will be constructed. “With new branches cargo trucks for instance will offload quickly and service delivery would be enhanced reducing the current long queues,” he commented adding, “there will also be a reduction of miscellaneous costs.”

The minister of trade and industry Francois Kanimba hailed the new investors saying that they represent a country that has shown tremendous economic progress. “We’re happy that you bring to Rwanda professionalism and replicating some of the best practices,” said Kanimba.

The minister noted that improvement of the warehouse would be a big achievement for the landlocked country.

Difficulties of accessing bank credit especially due to lack of collateral shouldn’t worry people anymore.
The Business Development Fund (BDF) is offering banks a financial security on behalf of borrowers as a way of promoting lending to upcoming business.

BDF is an established company meant to support SME’s by offering credit guarantee facility. They generate their funds from government entities such as the National Bank of Rwanda (BNR) Rwanda Development Bank (BRD) and several ministries.

The preferred ventures are Small and Medium Enterprises (SME’s) as well as agriculture.

In his remarks the minister of trade and industry, Francois Kanimba noted that the grant was timely with the government’s campaign to strengthen SME’s through encouraging the private sector and stakeholders to join the cause.

The BDF Chief Executive Officer Desire Rumanyika was quick to support the minister adding that the grant also aimed at facilitating upcoming businesses to access finance as a way of promoting the economy, of which 90% of its growth is gained from SME’s.

He further pointed out that the fund was formed to the tune of Rwf 11 billion and that Rwf 1.5 billion of the amount has be channeled to several banks to support agriculture projects.

This supplements a BDF grant for Rural Investment Facility which was availed by the ministry of agriculture and animal resources.

The grant is worth US$ 10 million with main purpose of providing incentives for both financial institutions and for entrepreneurs making productive investments in agriculture.

About accessing the grant, an applicant should present a solid business plan meaning it should be technically feasible, financially viable, with projected cash flow that will enable repayment within a maximum of 12months.

The project should also observe standard environmental norms, yet in case of amounts below Rwf 5million a simplified business plan will suffice.

In agriculture the three categories of investments that qualify include; primary production, processing of the products and agriculture support services.
BDF will also offer advisory services related to investment, corporate and microfinance development.

Rwanda’s Junior Chamber International (JCI) organizers for Terimbere Business Plan Competition have advised the youth to continue sending their business proposals before end of August.

The business competition which was initiated by the JIC- Rwanda Chapter in collaboration with stakeholders aims at promoting private entrepreneurship, with emphasis on business proposals showing viable employment opportunities.

According to Fabrice Shema Ngoga, the JCI World Assign in charge of Africa and Middle-East, the business proposals show a reasonable sustainability for at least more than three years.

He explains that application forms are currently available from JCI’s website www.jci/cc/local/rwanda then the filled forms can be sent to [email protected].

He, however, explained to igihe.com that applications will be obtained from those that want to improve their business ventures and those willing to start new viable ones and that those interested are only allowed to send one business proposal.

“Even those who are in groups will be required to nominate a representative who will defend their single business plan,” he stressed.

JCI’s executive secretary in Rwanda, Albert Nzamukwereka was quick to clarify on how the selection process will be conducted: “Those nominated will be taught how to professionally write business proposals by mentors that will also advise on the execution process,”.

After the second phase, all nominees will defend their business proposals before a panel of judges most of whom are foreigners.

Applicants are therefore obliged to draft their proposals in international renowned languages such as French and English.

Ngoga also pointed out that those in the second phase have high chances of proceeding with their business whether they are chosen or not since at that stage their proposals will be financially viable to attract credits from banks.

The winners at the competitions will be given loans ranging from US$ 5,000 to US$1 million.

“Some amount will also be given to winners as an appreciation.” Ngoga said without specifying the amount.

JCI is an international business initiative that currently has a membership of 200,000 people from 120 countries.

Members are composed of young entrepreneurs, professionals and university students who are ambitious towards improving their lives and the community at large.

Igihe.com has learnt that the CEO of Ethiopia Commodity Exchange,Dr. Eleni Gabre-Madhin, is in Rwanda to discuss the possibility of adding some of Rwanda’s commodities into the commodity exchange.

Gabre-Madhin says, “I am very excited to see the great progress made by Rwanda and to re-acquaint myself, though briefly, with the wonderful people I always remember”.

She lived in Kigali for four years during her childhood and attended the Belgium School of Kigali (Ecole Belge de Kigali). This is her first trip back to Rwanda since she left in 1978.

During her two-day trip, Gabre-Madhin accompanied by three colleagues will meet with Dr. Agnes Kalibata the Minister of Agriculture and Animal Resources and discuss the possibility of adding some of Rwanda’s commodities into the Commodity Exchange.

The Ethiopia Commodity Exchange was established in 2008 and works to eliminate “food shortages and hunger in Ethiopia.”

In December 2005, Ethiopian government established a Commodity Exchange aimed at transforming the country’s agriculture and bringing real progress toward the country’s poverty reduction and rural growth objectives.

The exchange trades in six crops, including coffee, wheat, and maize, both on a physical trading floor in Addis Ababa and electronically.

By: Randa Rugangazi

Yesterday, Bank of Kigali officially launched its initial public offering (IPO) of 300,304,000 shares at the price of RWF 125 per share. The bank is looking to raise RWF 37.5 billion from the IPO.

Bank of Kigali (BK) first declared its intentions for an initial public offering (IPO) December of last year. The government and the bank were going to publicly offer a total of 45 percent of the bank’s shares.

It was announced on 27 June that 300,304,000 shares would be up for grabs to the Rwandan public starting Thursday, 30 June.

The IPO will then close on 29 July and BK bank will be listed on the Rwanda Stock Exchange on 29 August.

During the IPO period, brokers will be taking orders from interested invested for shares.

The shares will then be distributed out to all investors. Different types of investors have a quota of reserved shares.

East African investors have access to 82,591,440 shares. Rwandan incorporated businesses have access to 45,045,600.

The bank’s chief operating office, Lawson Naibo told Igihe.com, “The funds raised will grow the bank’s lending portfolio and expand projects around the country.”

There is optimism for the bank’s shares to be oversubscribed by investors. This follows the successful Bralirwa IPO issued end of last year. Bralirwa’s stock price shot up by more than 50 percent.

The stock’s strong performance was later supported by Bralirwa’s net income growing by 62.8 percent. Net income is the balance of business after the reduction of expense costs.

A company listed on the stock exchange has to regularly release its annual earnings to the public.

Another contributing factor to the high optimism is BK’s strong asset base forecast to grow at 35 percent within the next five years.

This growth forecast is based on a solid business plan in which the bank plans to focus on loans to small and medium sized enterprises.

According to the Ministry of Finance, privatization efforts will boost stock market activity with increased options for investors.

The efforts will also support the country’s economic growth, attract investors, and increase national savings.

“Instead of depending on the government, as a shareholder, for capital to finance upcoming projects”, explained Mr. Naibo.

The Rwanda Stock Exchange provides the bank with access to a new financing platform.

KIGALI; Nyarugenge commercial court is expected anytime from now to pronounce itself on the survival of embattled telecommunication firm Rwandatel Igihe.com has learnt.

The court had earlier appointed an interim administrator of the company for 60days that have already expired.

During the 2-month period, Richard Mugisha was mandated to investigate the company the evidence of which would be principal in the court decisions for declaring the company bankrupt or continue with its operations.

Speaking to Igihe.com today Mugisha said that the period of 60 days were a fair period and he managed to finish the report on Rwandatel as requested by the Court, “It wasn’t so difficult for me to make the assessments and I think what I presented to the judges was fair enough,” he said.

Mugisha admitted that the company is now waiting the feedback from the Judges and then see the way forward.

Mugisha was appointed by the Commercial Court to take over specific roles and responsibilities that included the total management of all the company’s assets and accounts.

The court also tasked him to supervise Rwandatel’s day-to-day business and oversee expenditures and payments of its debts, taking of loans and giving of the company’s assets as guarantees for loans on behalf of the company in the period.

A rival telecommunication company MTN Rwanda as Rwandatel’s creditor is so suspicious since the interconnection fees of fixed lines is continuously increasing the debt and they are not sure whether the company will have capacity to pay back.

“According to the report I presented yesterday to the Judges, Rwandatel owes MTN a whooping Rwf1,341,557,553 and we don’t know if the company is in the position to pay back,” Paul Mugemangango, the Senior Manager, Legal and Corporate Affairs MTN Rwanda told Igihe.com.

The debt includes Rwf60M accumulated on fixed interconnection fees during the period of 60 days after the revocation of the company’s mobile license.

According to sources who had access to the report given to the Commercial Court judges, Rwandatel accepts all the debt claimed by MTN.

Other sources also say that the Chinese company; Huawei who supplied materials is demanding over US$40M and this company is suspicious of the Rwandtel’s ability to clear such a huge debt.

Rwanda’s utilities regulatory agency withdrew Rwandatel’s GSM Mobile license in April this year and within weeks, the Office of the Registrar General had instituted insolvency proceedings against the company.

The commercial court in Kigali then appointed an administrator who is a judge of the High commercial court to take charge of the company and advise the court whether the company was solvent or insolvent and should be liquidation.

Following commencement of insolvency proceedings, Rwandatel had laid off 43.2% of its workforce as part of a company-wide restructuring process to lower its expenditure.

Operating both GSM Mobile and Fixed licenses, Rwandatel had a total workforce of 317 employees. However, only 180 have been retained to run its remaining voice, internet and data services all of which run on the fixed network.

The effects of a liberalized market in Rwanda are beginning to manifest through the ongoing silent commercial war among mattress manufacturing companies in the country and those from East African member countries, Igihe.com has learnt.

Rwandaform a former monopoly of mattress products in Rwanda has now embarked on a campaign aimed at eradicating poverty beddings in form of make shift grass cushions onto which most poor families retire.

The company’s director Patrick Makuza says that the mattresses will be issued on credit to vulnerable groups.Makuza rather encourages those in need of mattresses to group themselves into cooperatives making it easier for them to access credit in banks. Those that purchase mattresses in bulk will receive a discount.

“Currently we’re working on how to implement this program, but our main aim is to have all Rwandans sleeping on quality mattresses,” he remarks arguing that Rwandaform mattresses are not only durable but also ensure ones physical health.

Makuza attacked those selling mattresses produced from neighbouring countries at very low prices compared to those of Rwandaform describing them as fake the very reason they are sold at extremely low prices.

In the last few years mattresses from neighbouring countries especially Uganda and Tanzania have amplified competition in the Rwanda market through offering prices Rwandan clients consider affordable compared to Rwandaform mattress prices.

However, Makuza claims, “the cheap mattresses are often substandard and that can lead to back pain when used. He adds that Rwandaform provides orthopaedic mattresses used by those suffering from back pain and can also be used by those who are not ill to help reduce fatigue”.

Efforts to reach for comment from the Rwanda bureau of standards were unsuccessful, as most could not answer their phones.

Lack of vital information about products and services on demand in the foreign markets,language barrier and high transportation costs continue to hinder efforts of Rwanda businesswomen from accessing the larger global market…

Rwandan women entrepreneurs through a specialized training program-Access Program, funded by the Canadian government are slated to enhance their access to a wider global market for their products and services.

“This Access Program aims at supporting women businesses through facilitating trade and making them understand the constraints they are facing”, explains Sebastien Turrel chief commercial officer of centre du commerce international.

“We are not supporting them financially but technically through knowledge training, market access , providing them online resources and online promotion”, Turrel explains.

For the start, 60 women entrepreneurs have been selected by Rwanda Development Board and the private sector federation. The selected women already have established businesses including handcraft businesses, horticulture and textile and leather.

The targeted women managers include those already exporting or with exporting potential and national trade organizations. The program is in line with ITCs mandate of supporting private sector development, strengthening capacities of women-owned businesses building a network of strong partners and accessing foreign markets among others.

The program specifically aims at increasing the capacities of public and private partners in beneficiary countries, directly supporting women entrepreneurs to be export ready and accessing foreign markets with innovating products, contributing better revenues and improved services.

Women at the training explained that challenges including language barrier and Lack of proper knowledge on what the market demands in terms of quantity, quality, and products continued to hinder their access to foreign markets.

While voicing her concern, Ntibagwire Donatille, managing director of Floris, a company that specializes in the sale and exportation of fruits says “transportation of our products to overseas markets is expensive , that’s why the prices of our products are higher than those of some of our competitors such as in Uganda. The same product that is sold in Uganda could almost be one dollar cheaper than here she says”.

Ntibagwire explains,“The current demand for our products is due to popularity of organic products in Europe but the situation could be much better”. She adds that the high transportation costs would be solved through increased government subsidies similarly done in other countries.

She also points out that they need to be more aware of some the market demands and what they are asking for.

This weeklong program drew experts from Cameroon, Senegal, Uganda and South Africa that will train Rwanda women entrepreneurs in components such as business counseling export training, trade information and access to foreign markets. A total of more than 800 women have been trained across Africa.

By: Igihe.com Reporter

Export opportunities await honey producers in Rwanda following the increasing demand of the country’s high quality honey on the international market.

According to the Rwanda Bureau of Standards (RBS) Director General Dr. Mark Cyubahiro Bagabe, Rwanda honey is on high demand in big markets of the Middle East and Europe. “But the challenge is the low production volume”, he notes with concern.

In response to increasing export, quality Dr. Bagabe reveals that, “RBS has adopted a multiple-pronged approach aimed at ensuring compliance of Rwandan honey with international Standards”.

The Bureau has since offered training to local honey producers on the aspects of producing quality honey targeting the whole value chain. Currently RBS has certified five honey-processing companies and some are already exporting their products.

Dr. Bagabe advises farmers to opt for high volume beehives that would increase quantity of honey produced. During harvesting, farmers are advised to avoid using smoke (smoke contains a chemical dioxin) feared to be a cancer agent(carcinogenic).

Florida Uwamariya the Accounts administrator of Rwanda beekeeping services center has told Igihe.com, “Our sector has registered remarkable growth. Beekeepers are enjoying the fruits of their work and the sales volume has been ever increasing.”

Uwamariya notes that honey quality improved after farmers received training in methods of safe extraction, post harvest honey management and packaging. “We are looking at how we can maintain hygiene and quality honey processing and setting up scale processing equipment to upgrade the quality standards and produce”, she said.

The International demand for Rwanda honey is largely credited for its naturalness much of which comes from the country’s endowed forest and eco system. Uwamariya says that the demand for Rwanda honey is expected to boost incomes of women that are mainly involved in the honey sector.