Turned Down For Financing In Africa? Check Your Records

Turned Down For Financing In Africa? Check Your Records

Lack of financial records is one of the main reasons entrepreneurs and businesses are turned down for financing in Africa, according to a report in HowWeMadeItInAfrica.

Many family-owned -and -run businesses, especially in Rwanda, keep inadequate financial records, said Aline Benihirwe, operations manager of Fusion Capital, a business financing and private equity firm that focuses on the East African market. The company expanded to Rwanda three years ago.

“You can’t find the accounts, you can’t find records so you have to bet on your imagination and your projections (as a private equity firm),” Benihirwe told HowWeMadeItInAfrica.

Rwanda’s business environment has improved in recent years, and foreign investors there have increased, Benihirwe said.

The World Bank Economy Rankings report ranked Rwanda No. 32 in the world for overall ease of doing business, up 22 places in the rankings from the previous report. The East African country overtook South Africa and is now ranked the second-easiest business environment in Africa after Mauritius, HowWeMadeItInAfrica reports.

Registering a business in Rwanda has become quick and simple, and entrepreneurs are often helped in the process by the Rwanda Development Board, Benihirwe said.

“Really it is quick, anyone can do it,” she said. “It’s not like other East African countries where you have to pass by a legal firm…You can go to (the development board) and there are teams there that will help you. They have their own lawyers; they have their own specialists. So registration is very quick.”