Micro Small Medium Enterprises in Rwanda

Rwandan small and micro businesses comprise 97.8% of the private sector and account for 36% of private sector employment. There are over 72,000 MSMEs operating in Rwanda.

Rwandan medium sized enterprises are well-established businesses that are individually or jointly owned. They have set administrative processes, qualified personnel and trained staff, employ between 50-100 people and account for 0.22% of businesses in Rwanda contributing 5% of total private sector employment.

Therefore MSMEs comprise approximately 98% of the total businesses in Rwanda and account for 41% of all private sector employment. The vast majority of MSMEs (93.07%) work in commerce and services. This is followed by 1.86% in professional services, 1.66% in Arts & Crafts, 1.33% in industry, 0.94% in financial services, 0.7% in tourism and 0.45% in agriculture and livestock.

MSME’s Policy Objectives

  • Promote a culture of entrepreneurship among Rwandans
  • Facilitate SME access to development services including business development services, access to local, regional and international markets and market information, promote innovation and technological capacity of SMEs for competitiveness
  • Put in place mechanisms for SMEs to access appropriate business financing
  • Simplify the fiscal and regulatory framework for SME growth
  • Develop an appropriate institutional framework for SME development

Challenges facing micro small and medium enterprises in Rwanda

  • Lack of entrepreneurial culture in terms of building human capacity and supporting potential growth
  • The unstructured environment in which SMEs operate and their inability to be open to new or innovative ideas presents a major challenge to the development of the SME sector
  • Limited innovation and competitiveness in the SME sector caused by a lack of technical and managerial skill.
  • Lack of good quality business development services tailored to their needs.
  • High cost of doing business is cited by MSME owners in terms of high energy and transport costs.
  • MSMEs in Rwanda face significant compliance burdens dealing with existing regulation. The current tax regime is both costly and difficult to comprehend
  • SMEs face difficulties accessing and utilizing information regarding local, regional and international pricing, a major constraint to business planning as well as about the regulatory environment in Rwanda and regionally.
  • Poor participation in the policymaking process, meaning they have little knowledge of interventions designed to assist them.
  • SMEs have inadequate access to market information that could benefit their businesses as well as inadequate knowledge about marketing their products both nationally and internationally.
  • SMEs often have limited abilities to develop the skills of their staff or to take advantage of local economies of scale in terms of energy, transport or raw materials.

 

About The Author

Related posts

Visit Us On TwitterVisit Us On FacebookVisit Us On Google PlusVisit Us On YoutubeVisit Us On LinkedinCheck Our Feed