RURAL SMALL AND MICROENTERPRISE
PROMOTION PROJECT

Project Brief

The project. The project aims to promote rural microenterprise development, with a view to:
(i) improving the living standards of disadvantaged rural groups; and (ii) increasing the contribution of the secondary sector to the Rwandan economy.

Who are the beneficiaries? The project is targeted at small microenterprises (SMEs), which for programme purposes are divided into three groups: subsistence; emerging; and expanding SMEs.
Subsistence SMEs are active or potentially active microentrepreneurs with less than Rwandan franc (RWF) 15 000 in savings or working capital. Emerging SMEs are more dynamic, often seasonally active enterprises with RWF 15 000 - 150 000 in savings or working capital, characterized by a reliance on artisanal and/or traditional skills. Expanding SMEs are full-time, specialized and more modern enterprises with growth potential and RWF 150 000 - 1.5 million in savings or working capital. Particular attention will be paid to very vulnerable groups, which include women, especially woman-headed households (22% at the national level); uneducated and/or under or unemployed rural youth; households headed by children and orphans; the rural landless; families affected by Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome (HIV/AIDS); and former soldiers resettled in rural areas.

What will the project do for them? Focusing on dynamic collaborators among the poorest vulnerable groups and with particular attention to gender issues, the project will: (i) promote the development of viable SMEs; (ii) train individuals with entrepreneurial potential; (iii) provide demand-driven support to local-level initiatives; (iv) strengthen the capacity of grass-roots organizations and of other stakeholders; and (v) provide the poorest segments of the rural population with access to financial services. The main purpose is to assist SMEs in becoming reliable sources of supplementary income for rural groups, particularly in areas with high population density and land pressure, and to contribute to diversifying Rwanda’s economy by promoting the secondary and service sectors. Due to growing demands on both these sectors, opportunities for self-employment are increasing significantly, especially in areas such as petty commerce, repair shops and handicrafts. Project support activities, including credit, will be tailored to suit the different operational categories (subsistence, emerging and expanding SMEs). In the case of new entrants and subsistence SMEs for example, apprenticeship programmes will be used to facilitate skill transfer from experienced established entrepreneurs to new entrepreneurs.

How will beneficiaries participate in the project? Beyond the direct provision of support to entrepreneurs, the project aims to create an enabling environment for SME development. Implementation will be demand-driven and determined by beneficiary priorities in all phases of the project, from identification of activities, to planning, implementation, and monitoring and evaluation. A major project component will be the promotion of literacy and empowerment with an emphasis on raising beneficiaries’ awareness of local development issues. Functional adult literacy training will provide the strategy and entry point for working with poorer groups. The project will respond to the
demands of rural groups and their grass-roots organizations, and will establish local financial institutions in collaboration with them, which will be managed by the beneficiaries themselves.