(Ecofin Agency) - African Development Bank (AfDB)’s executive board approved a $30 million loan for Rwandan government. According to a statement from the bank, the grant is to support the implementation of Rwanda Innovation Fund.

The resource will be used to set an investment vehicle focused on financing SMEs in technology and to develop the capacity of the country’s entrepreneurial and innovation ecosystem. The impact of these funds could affect other countries within East Africa.

This funding from AfDB is particularly timely because even though the country wanted to set the sector of technology services as economic growth’s driver, there was no venture capital fund to support young entrepreneurs.

Moreover, local investors struggle to meet early-stage enterprises’ financial needs and follow up investments, due to limited funding capacity and liquidity issues in the monetary system.

AfDB hopes the loan will make it possible to mobilize up to $100 million from the Rwandan Government and $300 million as support investments for 150 companies at various stages, in line with its leverage effect strategy.

Idriss Linge