Matching grants for companies in the
aftermath of the Covid-19 pandemic
Many micro, small and medium-sized enterprises (MSMEs) in rural Rwanda lack the necessary savings and skills to further develop their business. Smaller companies often find themselves trapped at subsistence levels. For them to expand their business and thus create more and better jobs, Invest for Jobs supports the Local Competitiveness Facility (LCF) of the Local Administrative Entities Development Agency (LODA). LODA, a government fund under supervision of the Ministry of Local Government (MINALOC), focuses on local economic development, social protection and capacity building of local administrative entities. The LCF combines matched grants with business development services to support private business partnerships for pro-poor local economic development.
For example, one business partnership involves a bee-keeping cooperative and a honey-processing company in remote Kirehe. The LCF supports the partnership’s business development by matching their funds to acquire equipment and machinery to produce more and better honey. By promoting such partnerships, the LCF leverages the advantages of business development along particular value chains.
The LCF application process is transparent and competitive. A call for proposals sparked the interest of private companies. To apply, they formed business partnerships with other companies along a specific value chain, usually combining formal and informal or micro and larger companies. Non-governmental organisations and technical and vocational education and training institutions can be additional partners.
After Covid-19 hit Rwandan MSMEs with little reserves, many companies were at risk of shutting down or reducing jobs. At this point, Invest for Jobs offered support to LODA to relaunch their Local Competitiveness Facility. Shortly after, the third round of the Facility was initiated, offering matching grants that range between 4,000 and 30,000 Euro.