In February, Nyirandayishimye Patience, a mother of one, had a shop in Batsinda, a struggling Kigali neighborhood, selling Ibitenge (African fabric). It is a business Nyirandayishimye has been engaged in for some time.

Suddenly, the whole world, and eventually Rwanda in mid-March went into lockdown as the COVID-19 virus spread. Nyirandayishimye used up nearly all the money from sales and the small capital for the business.

When markets and shops were eventually allowed to reopen but operating under strick measures, Nyirandayishimye tried to get back to work. The problem, though, her stock was down and had fewer cloth options to sell, had no rent, and the needs back home remained unchanged.

“I heard about the money which government had put in SACCOs for small businesses to help recover, and immediately went there,” says Nyirandayishimye.

She is referring to the Government’s Economic Recovery Fund (ERF), a two-year facility established in June to cushion businesses affected by the COVID-19 Pandemic. The government put Rwf 100billion it and promised a further Rwf 100billion would be added.

The Fund’s loans would be available in commercial banks, microfinance institutions and SACCOs which would then lend to eligible businesses. When government spoke of SACCOs, Nyiradayishimye and thousands of others like her spread across Rwanda, were excited. The reality on the ground, as all have found, is far different.

Nyiradayishimye narrated: “When I visited my SACCO, I found that the conditions are same as those of normal loans. They needed security (Ingwate), you have to be registered with RDB, and many other conditions. I left, disappointed of course.”

“As you can see, my stock is very small. I used to have more than 200 pieces at all times. There is just 40. No one is buying. I have to stand here all day, and then walk back home in the evening with no money in the pocket.”

Government in its much-publicised promotion of the Fund said “small and medium sized enterprises” or what are called SMEs, would be biggest target. The government’s own data shows that 91% of people in the 3.5m labour force, are employed by the informal sector. These are small unofficial businesses that support long chain of beneficiaries going into millions more.

The finance and trade ministries, in the promotional messages, did point out that for a business to benefit from the Fund, it had to be legally registered and demonstrate the negative impact of Covid-19 on their operations proven by at least 50 per cent year-on-year.

Two weeks ago, the Private Sector Federation (PSF) called on government to find a way of supporting the informal sector. The federation’s spokesman Ntagengerwa Theoneste suggested that one way could be that government can institute a special mechanism allowing for small businesses, all whom don’t meet the requirements, to be given those loans through associations and savings groups.

Aimable Nkuranga, executive director of Association of Microfinance Institutions in Rwanda (AMIR) told local media that all the requests for loans they have received, have been by people seeking new working capital to restart their businesses, because they had “eaten” the money during the lengthy lockdown.

He said: “The economic recovery fund should have been able to support a person with a stall in a market to get new stock. People we have in the informal sector don’t have official Rwanda Development Board registration or VAT clearance certificates, as required.”

The applications to get the Fund’s loans are ongoing. Some available data shows that by last week, more than 800 files had been submitted. The need for financing is simply overwhelming.

The other issue we have found from interviewing many people for this story, is that there has been widespread misinformation about the Fund. Government officials have not clearly explained to the ordinary people, perhaps keen only to promote the notion that government cares and has provided a fund to support businesses affected by the pandemic. Everyone with a business falsely believes they qualify for the Fund’s loans.

Zikama Ernest, a father of four, lives in Rugengabali Sector, Burera District. Before COVID-19, he was dealing in cows by buying them from villages and selling them to big business people who exported them to eastern DR Congo for meat. He made a profit of up to Rwf 10,000 on every sale and sold more than 30 cows every month, it was good business. The border remains closed to date.

Months later, he had lost all capital. Zikama told us that he went to local SACCO in August to see if he could get a Rwf 1m loan to start an alternative business since the border is still closed and he can’t keep doing nothing.

He said: “I think I had all the requirements. When I went back in September to check on progress of my application, the SACCO manager told me I had not clearly demonstrated how I had lost 50% of my business due to COVID-19. For my case, I have lost all business, and it was during the COVID. I don’t see how else I should explain my situation. I consider this as injustice. I am wondering where to find capital.”

Bapfakuvuga Abdoul Kalim, Bugesera District

The father of three lives in Kabenga cell, Mayange sector, Bugesera district. He owns Best Transportation Company Services Ltd, which was running a network of bicycle taxis in Kicukiro District, Kigali. Before COVID-19, he had 50 bicycles employing as many people. Bicycle taxis were only allowed to return to operations late last month, but with new conditions.

Bamfakuvuga is left with 13 bicycles as others need crucial repairs, and government now requires they have helmets. To deal with loss of business and revamp operations, he applied for the COVID-19 Fund’s loan because he was aware of its existence.

He said: “The government has set up a fund to help people like me, but the banks are using excuses to deny us the loans. The requirement that I have to clearly demonstrate how the pandemic affected my business, is ignoring the reality. My business is viable and I wouldn’t have had any trouble repaying that loan.”

Harerimana Theogene, Moto taxi in Kigali

He narrated: “Before COVID-19, I was making Rwf 10,000 daily and depositing the agreed Rwf 5,000 for my boss. We all went into lockdown. Since motos resumed, I never make above Rwf 4,000, meaning I don’t have what to deposit for my boss.”

“My moto had developed serious mechanical problems which needed lot of money. Luckily, I heard on Radio Rwanda that government is offering loans to anyone with a small business impacted heavily by coronavirus. My SACCO branch told me I don’t qualify because my business is not registered. It was surprising. I replied that my moto is registered in a cooperative. They made it clear I do not qualify.”

Economist Habyalimana Straton says government should have designed a middle ground to also target businesses considered informal.

“Despite those people operating informally, they work from places known to Government,” he said. “The informal sector is a huge potion of our economy. When these small businesses don’t survive, it impacts heavily on the wellbeing of the economy.”

Trade and Industry Minister Hakuziyaremye Soraya said at a joint government press conference with other colleagues on October 2, that government had reviewed the requirements to access the COVID-19 Fund after getting large number of complaints.

Minister Hakuziyaremye noted: “For example, in the original requirements we asked applicants to show us how their business had been affected to 50% level due to Covid-19. We have noted that not only did many incur unbearable losses, but many others actually closed. So, we have reduced to 30% and today more people will get access to the Fund.”

”We are aware of the fact that the informal sector is unable to access the Fund. We will help those we can can to register their businesses and have formal operations such that they can benefit from the Fund.”