Poor organisational structure hampering growth of SMEs

The Stanbic Bank Chief Executive Officer, Patrick Mweheire has said Medium Enterprises (SMEs), quite often lack corporate governance and necessary organisational structures affecting their growth and development.

Mweheire said SMEs are about 90% of the Uganda's private sector, employing about 3 million Ugandans but the rate of business collapse is severe with over 70% failing to survive for three years.

 "If you look at SMES in Uganda, 70% don't make it up to their third anniversary and the issue is lack of necessary structure, governance and financial records to be able to not only be able to borrow in the markets but also attract investments outside," Mweheire said.

He added: "You find that the wife is the chief finance officer, the son is the chief operating officer; no board meetings…they only have the meetings on a mobile lunch in the weekend. People must put structures in place because their availability makes companies expand."

Mweheire was speaking during the launch of Total Uganda's Start upper challenge that aims at turning young people's innovations and passions into sustainable businesses. The launch took place at Sheraton Hotel on Tuesday and the opportunity is available for Ugandans aged 35 years and below.

"Lack of these structures has also made it impossible for some local companies to win international bids. For example during Stanbic Bank's SMEs training recently, we found out that many business entities didn't care about health and safety policies which are key during bidding processes," he explained.

Pierre Jessua, the country chairman Total Uganda said there is need to encourage entrepreneurship initiatives because the strong and demanding expectations of young Africans in terms of employment aren't easily satisfied by governments.

"Total wishes to encourage and support entrepreneurship through social and societal challenge aiming at a tangible contribution to African economy emergency," Jessua said at the launch.

Initiated by Total Group in 39 African countries simultaneously, the challenge will support innovative projects which are less than two years old and applications will begin on October 9 and end on November 13, 2018.

Obi Imemba, the Total Uganda Managing Director told journalists that the challenge offers finalists and winners significant exposure through wide coverage of the Total network to create visibility of their projects.

He said the three winning projects will be awarded sh114m.

"A new category has also been introduced where there will be an award for the top female entrepreneur. With this recognition, Total is encouraging women to participate in bigger numbers for the Start upper Challenge," Imemba said.