Civil society organizations (CSOs) have commended the government for putting in place the Small Business Recovery Fund (SBRF) to support struggling small and medium-sized enterprises (SMEs). 

Speaking to journalists in Kampala, Joanita Nassuma, a trade policy analyst said the government should embark on raising awareness about the fund for it to benefit the targeted groups.  

“We commend the government for involving private sector organizations and CSOs in the process of developing the modalities for the SBRF. We call upon the government to work with the wider SME associations to mobilize and raise awareness among small businesses to ensure effective utilization of the SBRF,” she said. 

Joanita Nassuna, a Programme Associate at SEATINI addresses journalists in Kampala on Sunday. (Photo by Benon Ojiambo)

On November 23, the government through the Ministry of Finance, Planning and Economic Development launched a sh200b SBRF which is a matching grant. 

The government is contributing sh100b and other participating financial institutions (PFIs) contributing sh100b. The interest rate chargeable by PFIs shall not exceed 10% per annum whereas money from the government is interest-free. 

The SBRF is a revolving Fund that will address the financial challenges of SMEs by providing affordable credit to support recovery from the effects of the COVID-19 pandemic and lockdowns.

Herbert Kafeero, SEATINI's communications coordinator addresses journalists in Kampala on Sunday. (Photo by Benon Ojiambo)

“We are going to work very closely with the Bank of Uganda to make sure this money reaches its intended beneficiaries. If you don’t know what to do with the money, please don’t ask for it. This is a loan that you are required to pay back,” John Walugembe, executive director at the Federation of Small and Medium-sized Enterprises, said.  

“The money from the government is interest-free. This means when you borrow sh10m from the PFIs, you will only be required to pay interest on sh5m,” he added. 

Herbert Kafeero, communications coordinator at Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) said SMEs should be trained on how to utilize the resources. 

John Walugembe, executive director of the Federation of Small and Medium Enterprises. (Photo by Benon Ojiambo)

“Robust training should be prioritized to make sure there is proper utilization of the funds but also work with associations. The government also has agencies in place, they should work within them,” he said. 

Since last year, SEATINI and other CSOs have been advocating for a fund that addresses the challenges SMEs face while trying to access the existing financial packages.

On June 28, 2021, the Executive Board of the International Monetary Fund approved a three-year financing package as an Extended Credit Facility (ECF) for Uganda in the amount of Special Drawing Rights (SDR) 722 million (equivalent to $1b) to support the post-COVID-19 recovery.