Development of a Business Plan for the Envisaged Export Credit Guarantee Facility in The Development Bank of Rwanda
Area of Operation: Rwanda
Duration of Assignment: March 2022 – October 2022
Name of Client: KfW Development Bank
The Rwanda Development Bank (BRD) in cooperation with KfW, aimed to determine whether to proceed with creating an export credit guarantee fund to support its Export Growth Facility to support SMEs with credit guarantees to facilitate export growth.
To assess the viability of the envisaged ECGF, LANDT was asked to develop a business plan that includes the potential mission, vision, and objectives as well as institutional set-up of the ECGF within the BRD, validate the financial model prepared during the previous study including the pricing strategy, update the market assessment to reflect recent developments following the onset of COVID-19, provide advisory support on the rules and regulations of the National Bank of Rwanda (BNR) that is applicable to the ECGF, and accompany and support KfW in its diligence mission.
- Held discussions with export businesses, financial institutions, other stakeholders, to understand the status, emerging issues, constraints faced, macro situation, and possible need for and design considerations for an ECGF facility.
- Carried out an updated market assessment to determine the key features of the export sector, identify target export businesses, the impact of COVID-19 on the sector, the key constraints to access to finance, and articulate how the ECGF facility will mitigate such constraints.
- Developed a business plan that includes the mandate, vision, strategies, and mission of the ECGF, the eligibility criteria, the delivery channel for guarantees, the design of products, and an M&E framework.
- Proposed a design for the ECGF that included products, delivery channels, technical assistance approach, short-, medium-, and long-term strategies, human resource needs, and a results measurement approach (M & E).
- Validated the financial model of the previous study by reviewing the existing pricing model and suitability of a risk-based approach, developing the fund’s budget, funding strategy, and leverage limits, carrying out scenario analysis and stress testing, marketing sounding, and calibrating the model once relevant parameters have been considered.
- Assisted in the analysis of regulatory requirements and the suitable recognition category for ECGF guarantees.