Financial constraints on exporting: Preliminary evidence from Rwanda’s Export Growth Fund
Rwandan firms receiving the Export Growth Fund’s subsidised loans grew revenues by around 50%, expanded permanent employment, and were more likely to export. On average, two years after obtaining the subsidised loan, firms increased their Corporate Income Tax payable by 80-100% and their PAYE tax payable by 30-40%.
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Bai-et-al-Policy-Brief-March-2025.pdf
PDF document • 2.3 MB
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IGC_EGF_Evaluation_Appendix.pdf
PDF document • 1.36 MB
Industrial policies are a major tool for governments to foster and direct industrial development, but evidence about their effectiveness remains scarce.
• The Export Growth Fund (EGF) provides subsidised loans to Rwandan exporters and potential exporters (10–12% interest vs. market rates of 17–19%).
• This brief provides preliminary evidence of the impact of EGF on firm outcomes, matching loan and administrative data of EGF recipients and non-recipients.
• Benefiting firms grew revenues by about 50%, expanded permanent employment by 30%, and were 10 percentage points more likely to export. Increased tax receipts pay back EGF's costs within five years.
• This brief describes potential next steps: providing state-of-the-art impact estimates using a randomised controlled trial in the form of a door-to-door marketing campaign.