50% Small enterprises close annually
MORE than 50% of all Small and Medium Enterprises (SMEs) close shop annually for lack of finance, the Uganda Small Scale Industries Association (USSIA) has said.
By Alice Kiingi
MORE than 50% of all Small and Medium Enterprises (SMEs) close shop annually for lack of finance, the Uganda Small Scale Industries Association (USSIA) has said.
“The rate at which SMEs are running out of business is 50% annually up from about 35% as a result of limited access to finances, high interest rates and limited periods to finance loans,†Abdul Buwembo, the USSIA, manager, said.
“Most micro-finance institutions are located in urban centres, making it difficult for the SMEs in rural areas to access financial services,†Buwembo said.
He said the SMEs are also hampered by inability to identify market opportunities.
To mitigate the finance deficit, the Government should set up a guarantee scheme offering low interest rates to the SMEs purchase industrial machinery, Brij Kishore, the managing director of Kishore Company, India, manufacturer and exporter of machinery, said.
“The Indian government has boosted the SMEs by giving them subsidies and offering low interest rates, making the sector one of the best performers in developing countries,†Kishore said.
He said during the 15th Uganda International Trade Fair that small businesses are the backbone of the economy and employ many people, thereby increasing the tax base.
Kishore said the company supplies juice extraction machines, candle and spice machines, filtration and washing equipment, canning and bottling machines to SMEs and large scale producers.
He said the candle and spice machines are on high demand but the show-goers are booking the machines by depositing some money because they are financially constrained.
MORE than 50% of all Small and Medium Enterprises (SMEs) close shop annually for lack of finance, the Uganda Small Scale Industries Association (USSIA) has said.
“The rate at which SMEs are running out of business is 50% annually up from about 35% as a result of limited access to finances, high interest rates and limited periods to finance loans,†Abdul Buwembo, the USSIA, manager, said.
“Most micro-finance institutions are located in urban centres, making it difficult for the SMEs in rural areas to access financial services,†Buwembo said.
He said the SMEs are also hampered by inability to identify market opportunities.
To mitigate the finance deficit, the Government should set up a guarantee scheme offering low interest rates to the SMEs purchase industrial machinery, Brij Kishore, the managing director of Kishore Company, India, manufacturer and exporter of machinery, said.
“The Indian government has boosted the SMEs by giving them subsidies and offering low interest rates, making the sector one of the best performers in developing countries,†Kishore said.
He said during the 15th Uganda International Trade Fair that small businesses are the backbone of the economy and employ many people, thereby increasing the tax base.
Kishore said the company supplies juice extraction machines, candle and spice machines, filtration and washing equipment, canning and bottling machines to SMEs and large scale producers.
He said the candle and spice machines are on high demand but the show-goers are booking the machines by depositing some money because they are financially constrained.