Path to Growth: a framework to strengthen access to finance for Rwandan SMEs

In Rwanda, access to finance remains a major challenge for many SMEs. To address this, ADA and LuxDev have developed the Path to Growth, a framework within the Support to the development of the Kigali International Finance Centre project that goes beyond assisting SMEs on an individual basis. The Path to Growth offers a structured pathway to strengthen their business models, facilitate their access to appropriate financing, and build lasting links between SMEs, enterprise support organisations and financial institutions.

Rwandan SMEs play a key role in job creation, the development of local value chains and economic diversification. Agriculture alone accounts for 25% of GDP and 41% of employment. However, many SMEs in agriculture, fisheries and aquaculture struggle to access suitable financing due to high collateral requirements, restrictive criteria, high interest rates and limited capacity to meet financial institutions’ requirements. Many fall into the “missing middle”, lacking both tailored financial products and non-financial support.

The Path to Growth addresses the gap between SME potential and access to finance. It treats access to finance as the result of a maturation process, supporting businesses to structure their organisation, clarify their needs, strengthen their management capacities, and present a stronger case to financiers.

Key stages of the pathway:

The Path to Growth uses a Market Systems Development approach, strengthening not only SMEs but also the broader ecosystem, including enterprise support organisations, financial institutions, public actors and business networks. It promotes better investment readiness, improved dialogue with financiers, and stronger local support services. Key tools include:

• a community of practice for continued peer learning and collaboration between participating SMEs;
• a funding map that matches SMEs' needs with the most appropriate financial solutions available in the market.

Path to Growth is designed as an evolving framework to be adopted by local actors and expanded to other economic sectors. By strengthening collaboration and structuring SME support, it contributes to more inclusive and sustainable financial ecosystems and to market growth.

The Support to the development of Kigali International Finance Centre project is financed by the Grand Duchy of Luxembourg and implemented by LuxDev, the Luxembourg Development Cooperation Agency.