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Small and medium enterprises strangled by lack of finance

By John Odyek

Added 7th June 2017 04:34 PM

Fabian Kasi, managing director Centenary Bank has said the challenge to get finance is a main obstruction to the growth of small and medium enterprises in Uganda.

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Fabian Kasi, managing director Centenary Bank has said the challenge to get finance is a main obstruction to the growth of small and medium enterprises in Uganda.

Access to finance is vital for business development. Investment and innovation will not take place in Uganda without adequate financing.

Fabian Kasi, managing director Centenary Bank has said the challenge to get finance is a main obstruction to the growth of small and medium enterprises in Uganda.

“SMEs are the engine behind proliferation of economic growth in Uganda and Africa, thus the attention as an emerging economy. Financing is necessary to help SMEs set up and expand their operations, develop new products and invest in new staff or production facilities and provide the much needed jobs,” Kasi said. This was during the national competitiveness forum at the Kampala Serena Hotel yesterday.

It was organized by the ministry of finance’s Competitiveness Investment Climate Strategy Secretariat. It was held at the Kampala Serena Hotel, Kampala.

Kasi made a keynote presentation on the topic ‘leveraging domestic resources for boosting investment in Uganda’. He said Uganda has to look inward to finance its development to be able to achieve sustainable development.

Elly Karuhanga, chairman Uganda Chamber of Mines and Petroleum said commercial bank lending was comparable to a bank giving you an umbrella during the dry season and when the rainy season starts they take away the umbrella. Karuhanga explained that when you need additional money most the bank does not give you.

Andre Dellevoet, group chief executive officer aBi Trust said commercial banks are not comfortable to lend money for primary production which includes the work of farmers. Dellevoet said the trust works to finance agricultural activities from primary production to retail markets, asset finance lease, guarantee insurance schemes.

Dellevoet providing finance for agriculture requires looking at the entire value chain. He noted that one model cannot work to provide agriculture credit because the needs are fragmented.

He said more financiers should come into to provide agricultural credit to support the growth of the sector.

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