In 2012, more than 650 residents of Kamonyi district met at district headquarters with the aim of launching a massive and collective investment group.
The meeting held in September was the founding general assembly. Members named their project Kamonyi investment group-KIG. They pledged Rwf 465 million, but their target was to pledge up to a billion Francs.
Excited with the prospects, members proposed that KIG would invest in a mega hotel, real estate and a milk collection center.
To raise enough capital, group members agreed that a single share in the Investment group would cost Rwf 100,000 and each member was allowed to purchase as many shares as they could afford.
Although about 465 million had been pledged, only Rwf 70 million was collected and deposited on the KIG account.
However,since the first general assembly in September 2012, members have never met again and nothing has been implemented. Shareholders want their money refunded with interest.
“What we want is our contribution and this time with interest, we assume this money has been working,” said Tharcisse Nzamwita.
Marc Rugenera, the KIG executive committee chairman said the group ideas failed to take off due to insufficient capital. This led the board into speculation on where to invest the little money collected.
“Lack of appropriate business plans still haunt the group,” warned Rugenera who has since been outside the country.
Emmanuel Bizimana with 4 shares in the investment group told KT Press, “What we want is the group to return our money and with interest. We know this money has been making profit for all these five years.”
Meanwhile, Kamonyi district Mayor Aimable Udahemuka, told KT Press there are plans to revive the investment group.
“As district, we are organising a general meeting before end of August to address all challenges because we support private ventures,” He said.
Tracing collective Investments
In 2002, President Paul Kagame summoned opinion leaders and traders from Nyamagabe district. He wanted to discuss with them how to develop their region that was lagging in terms of development.
The meeting resulted in creation of an Investment Group (MIG) which attracted 890 shareholders. Four years later, they had raised Rwf1 billion ($1.3 million) and began investment activities.
The group eventually invested in a $ 10 million Mushubi tea factory with a 20,000 tons annual production capacity.
Vincent Ngarambe, the MIG’s Managing director says the investment group is currently valued at Rwf10 billion with over 3000 workers.
After the creation of MIG, many more districts imitated a similar model and created their investment groups.
According to Private sector Federation statistics, over Rwf315b (approx. $450m) was raised in private equity by the local investors since 2006, harnessing the government plans of raising domestic investments.
Whilst by the end of 2015, there were about 90 investment groups. Of these groups, 53 have investment capital above Rwf200m (approximately $285,714 each).
Such ventures include Gasabo Investment Group that is expected to build a modern complex on the current Kimironko market and Champion Investment Corporation that built a Complex worth $30 million at the downtown Kigali city Taxi Park.
Despite this performance, other groups failed while others are still struggling such as Rulindo and Bugesera Investment Group.
Government says some investment groups are falling short on management.