Access to finances remains one of the biggest challenges for the growth of Small and Medium Enterprises (SMEs).
But entrepreneur, Dr. Maggie Kigozi says Ugandans running SMEs can still raise financing by way of contributing in groups just like they do for weddings and introduction ceremonies.
Dr. Kigozi notes that with the luxurious weddings being the order of the day, many people have been pushed to borrow or to take out bank loans so as to impress at their matrimonial ceremonies than recapitalising their small businesses.
SMEs in Uganda make up over 70 percent of the Ugandan economy and contribute above 20 percent of the country’s GDP. Their work spans from service provision, selling of goods, information technology, agriculture and furniture making among others.
But lack of SME financing holds back high potential enterprises, yet investing in their growth benefits the whole value chain such as suppliers, processors, distributors and storage facilities. Kigozi says that it’s time for Ugandans to change their spending culture and embark on contributing towards business financing rather the unnecessary extravagant wedding.
“Ugandans are very consumerist, people like spending on expensive phones, weddings but they never think of contributing towards business financing and end up running to banks for loans” Kigozi said.
Reports indicate that Ugandans spends Shs.2 billion on introductions every weekend; money that is enough to be invested as capital or a re- boost some dying business.
Kigozi says that for business sustainability, entrepreneurs need to go an extra mile to acquire training and skilling to enable them first understand the current market situation and the changing trends.
‘Even if you aren’t educated before you start any business train to get entrepreneurship knowledge, the world is changing therefore one needs to understand how businesses are run” Kigozi adds.
She however praised Businesses that are investing in technology.
Over 2.5 million people are employed in this sector, where they account for approximately 90 percent of the entire private sector, generating over 80 percent of manufactured output that contributes 20 percent of the gross domestic product.