FACILITY FOR PREFERENTIAL REFINANCING OF LONG-TERM LOANS FOR AGRICULTURAL EXPORT AND AGRO-INDUSTRIAL ACTIVITIES

I. ORIGIN OF FUNDS

The resources of the Funds are obtained from repayment of the consolidated outstanding government debt owed to the National Bank of Rwanda.

II. ELIGIBILITY CONDITIONS TO FUNDS AND PROCESSING OF CREDIT

INQUIRY

II.1. Conditions of eligibility to the Funds

The eligibility to the financing of this fund concerns medium and long-term loans for agricultural and agro-industrial (including animal husbandry) projects, which are considered bankable by participating banks and that result into easily measurable net economy of foreign reserves. This includes activities of import-substitution that are financially sustainable.

Nevertheless, the priority will be given to activities of exports in case resources are deemed insufficient to cover all potential needs.

II. 2. Processing of Credit inquiry

The inquiry that the bank participating in the management of the Fund presents at the Central Bank should prove that the project is technically feasible and financially sustainable, and is based on a convincing market research. The inquiry should include loan agreement, repayment schedule and interest rate applied.

III. EXTENT OF INTERVENTION AND APPLICABLE CONDITIONS

III.1. Level of Intervention

In order to allow many beneficiaries, the amount for the Fund’s participation to an eligible project is limited to RWF 200 million. However, the NBR can derogate this limit, depending on the availability of resources and the needs expressed. The processing of requests by the National Bank of Rwanda is done on the-first come the first-served basis.

III.2. Maturity and grace period

- Maturity: will be assessed following the nature and profitability of the project;

- Grace period: a grace period of 1 to 3 years for the repayment of the principal will be granted following the nature of each project.

III.3. Repayment Schedule

A commercial bank participating in the Funds repays at maturity, even though the final beneficiary has not yet repaid his due. The bank must immediately inform the Central Bank about any anticipated repayment by the beneficiary. In both cases, the Central Bank automatically debits the bank’s current account.

III.4. Applicable Interest Rates

The rediscount interest rate is fixed at the average inflation rate of the last three years. The lending rate that a bank applies to its client is freely negotiated. However, the Central Bank reserves the right to reject any application of interest rate showing a very high margin.

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