Stanbic, Enterprise Uganda offer SMEs business skills training

Small and medium enterprises (SMEs) have been advised to acquire basic accounting and management skills in order to boost business growth and customer satisfaction.

According to Charles Ocici, the enterprise Uganda Executive director, SMEs must also acquire human resource development, and also create more sustainable jobs in the economy.

He said although limited access to finance has been blamed for the high SME failure rates in Uganda, poor financial management, lack of proper bookkeeping and guidance on how to run a business properly have also been identified as a key contributor to the rampant collapses.

"The reason most of our SMEs collapse in not necessarily because of capital related inadequacies, but also because poor business skills. It doesn't matter whether they start somehow big, eventually, they either collapse or require bail out because their business skills are poor," he said.

This was on the sidelines of the graduation of more than 210 SMEs, basic business and administration skills, at the golf course hotel on Wednesday.

He said majority of SME business owners have never been formally trained to run their companies professionally and as a result most struggle and collapse after just a few years.

According to the 2015 Global Entrepreneurs Monitor (GEM) report, Uganda had the best entrepreneurship growth rate at 28%, although more than half of the businesses started don't live to celebrate their first anniversary.

Ocici said up skilling SME's is such an integral part in ensuring their long-term success, and contribution to the national economy.

"SMES in this country account for approximately 90% of the entire private sector, with over 80% of manufactured output and 18% of GDP contribution. If we are looking at sustainable economic growth, then we must teach the fundamentals to SMEs because these are the ones to turn into giant businesses tomorrow," he said.

According to statistics from the ministry of trade, SMEs constitute the bulk of Uganda's private sector, and employ more than 60% of the labour force in the country.

Stanbic bank's Head of Personal and Business banking, Kevin Wingfield, said SMEs are considered one of the driving forces of modern economies, due to their multifaceted contributions in terms of employment generation and export promotion.

He said the SMEs sector in Uganda has limited access to finance due to lack of financial records, collateral security and credit worthiness, which later affects the performance of the business.

"Our objective as Stanbic Bank working through Enterprise Uganda is to help bridge the skills gap in the SME sector, by equipping the business proprietors with basic business leadership, administrative and people-management skills they need to enable them run sustainable and profitable long term enterprises," Wingfield explained.

He said the one-year program was initiated to improve the capacity of small businesses to become more self-sustaining by acquiring specialized skills on how to handle financial and administrative management and identify profitable investment opportunities for future growth

Statistics from the Uganda Bureau of Statistics show that SMES account for approximately 90% of the entire private sector, with over 80% of manufactured output and 18% of GDP contribution.