Micro, Small and Medium Enterprises (MSMEs) in Uganda are increasingly becoming attractive to lenders based on their digital financial activity rather than traditional requirements such as collateral and formal registration, stakeholders at the recently concluded 10X MSME Finance Exchange have revealed.
The exchange, convened by the United Nations Capital Development Fund under the 10X Programme, examined how Uganda’s financial ecosystem is evolving to improve access to finance for small businesses.
Discussions at the forum highlighted a growing shift toward data-driven lending models, where financial institutions and fintech lenders assess businesses using alternative indicators such as mobile money transactions, digital sales records, cash-flow consistency, and online platform activity.
For years, many MSMEs have struggled to access formal financing despite contributing significantly to Uganda’s economy, largely due to informality and limited financial documentation. However, emerging digital financial systems are now enabling lenders to evaluate businesses based on operational performance rather than ownership of physical assets.
Participants noted that while many entrepreneurs already use mobile money and other digital tools, relatively few are intentionally leveraging them to build structured business records or manage operations systematically — factors that are becoming increasingly important in determining creditworthiness.
Speaking during the exchange, Samantha Malambo, Country Coordinator for FinWise at UNCDF, emphasized the need for a coordinated ecosystem approach to MSME financing.
“MSME finance requires a coordinated ecosystem approach, where inclusion is driven by interoperability, data use, and collaboration across financial institutions, fintechs, and development actors,” she said.
Malambo added that sustainable financial inclusion depends on systems that reflect the real financial lives of women entrepreneurs and small businesses.
The discussions also highlighted ongoing initiatives under the 10X Programme aimed at strengthening digital financial behaviour among entrepreneurs. One such initiative is the “Business Ku Siimu Yo” campaign, which encourages business owners to use mobile phones as management tools for tracking transactions, generating financial records, and building credible digital footprints over time.
Meanwhile, Edith Tusuubira , Commissioner of the Microfinance Regulation Department at the Ministry of Finance, underscored the government’s role in creating a regulatory environment that supports innovation while protecting consumers.
She stressed the importance of responsible lending, MSME formalization, and adaptive regulatory frameworks capable of evolving alongside digital financial services.
The exchange concluded that in Uganda’s emerging digital economy, MSMEs are becoming more bankable not because of the assets they own, but because of their ability to demonstrate consistent and measurable financial activity.