Publications

In Rwanda, the Business Development Fund Ltd aims to support the initiation, growth, andsuccess of Small and Medium Enterprises (SMEs) by providing credit guarantees,facilitating their access to bank financing. This study explores the efficacy of the creditguarantee fund in stimulating SME growth in Rwanda, particularly within Kigali City. Itdelves into the accessibility of the BDF Ltd credit guarantee fund for SMEs, assesses itscorrelation with employment generation, evaluates its influence on SMEs' sales turnover,and analyzes its responsiveness to borrower demands from 2011 to 2013. Employing anexplanatory research approach, this study employs a mixed-methods approach,combining qualitative and quantitative methodologies for data collection. A sample of 98units was selected, utilizing interviews for primary data and document analysis forsecondary data. Statistical analysis, including SPSS and tools like Kendall's tau correlationand regression analyses, was employed to scrutinize the relationship between variousvariables. The findings indicate significant hurdles faced by SMEs in Kigali in accessingthe fund, with 95.2% of respondents citing challenges such as prolonged applicationprocesses, increased collateral requirements, low bank utilization of the fund, additionalbank prerequisites, and perceived inequities. The research reveals a noteworthy positiverelationship (r = .37, p <.05, one-tailed) between the guaranteed amount for SMEs in Kigaliand employment creation, where an estimated 3,333,333 RWF guaranteed amount predictsthe creation of an additional job. Moreover, the study underscores that credit guaranteescontribute positively to the beneficiaries' sales turnover and notes that the BDF Ltd haseffectively met borrower demands during the 2011-2013 period. This research presents acomprehensive analysis of the impact of credit guarantee funds on SME growth in Rwanda,shedding light on challenges faced by SMEs in accessing these funds and highlighting thefund's substantial role in fostering employment and bolstering sales turnover within theSME sector.Keywords: Business Development Fund Ltd, SMEs, Credit guarantee fund, Kendall's taucorrelation, Ba