Small and Medium Scale Enterprises (SMEs) are widely regarded as the engine of growth of any economy, a reason for the increasing support offered to them by governments around the world. The Uganda Investment Authority (UIA) is planning on threading a similar path.
This week, it announced a two-day event aimed at pairing 200 SMEs with 70 Private Equity (PEs) and Venture Capital (VCs) firms. “Between microfinance and mega deals in Uganda lies the missing middle: a lack of SME business finance that is holding back a swathe of high potential enterprises,” Dr Frank Ssebowa, Executive Director at the UIA noted. “This is where private equity and venture capital comes in handy.”
The SMEs will be selected with the help of business groups like the Uganda Manufacturers Association, Private Sector Foundation Uganda, Uganda Small Scale Industries Association and the Kampala City Traders Association. Efforts will also be made to ensure that the final selection is inclusive and spans the country’s economic value chain. “They (SMEs) will be required to prepare business projects that require financing early such that they are shared with PEs/VCs. There is no better way to grow the economy than offer affordable finance options to the SMEs,” added Ssebowa.
In Uganda, Small businesses make up 90 percent of the private sector. They also account for 80 percent of the country’s manufactured output and 75 percent of the country’s total economic output.
By Emmanuel Iruobe