In March of this year, Rwanda has received a USD 30 million loan from the African Development Bank Group to fund promising young promising innovators through the newly established Rwanda Innovation Fund(RIF). This project is aimed at promoting innovation in Rwanda and the East African Community at large. This fund will be the backbone of an investment vehicle set on financing tech SMEs in Rwanda; to accelerate the country’s entrepreneurial ecosystem and promote innovation.
The project is in line with Rwanda’s strategic vision 2020 plan geared towards achieving a rapidly growing economy in an environmentally positive manner. The plan is to achieve this by letting the private sector spearhead the growth.
The fund is a godsend for young entrepreneurs in the country which has very few VC funding bodies and local investors willing to support early-stage ventures.
Abdu Mukhtar, Director at the Bank’s Private Sector, Industrialization and Trade Development Department said, “By extending this loan to the Government of Rwanda, the Bank wants to enable the country to develop the sector and attract private investors. The project will enable the Bank to play a leading role in helping Regional Member Countries develop sustainable innovation ecosystems, spur entrepreneurial growth, address funding gaps, reduce poverty, and promote socio-economic growth.”
The Fund is set to support and provide equity financing for SMEs, train tech-oriented entrepreneurs in business planning and management, and increase awareness and sensitization with respect to intellectual property rights in Rwanda, the East African Community and beyond. The Rwandan Government and private investors aim to mobilize $100 million in direct commitments with a target to make back up to US $300 million on the investments.
Prime Minister Ngirente says, “Under the leadership of H.E Paul Kagame, the President of the Republic, Rwanda will keep supporting research and technology with particular emphasis to link our young innovators with the labor market.”
RIF should be able to support more than 150 companies at various stages and invest in about 20 early growth stage opportunities, creating north of 8000 jobs within 10 years. It will provide capacity-building to 7-10 incubators and accelerators, facilitate 3-5 additional angel networks, and training to about 30,000 entrepreneurs across the region.
The RIF project also aligns with the AFDB’s top 5 priorities for the 10-year strategy to leverage innovation across sectors to promote inclusive growth, youth empowerment, and the creation of high-value jobs, as well as the bank’s IT and Human Capital strategies with regards to skills development for competitiveness, enhancing technology’s contribution to the country’s GDP and unleashing innovation economies across Africa.