The Executive Director of the Federation of Small and Medium small sized Enterprises Uganda John Walugembe has tasked government and Bank of Uganda to remit the pending balance of shillings 193 billion meant for the small business recovery fund.
The funds are expected to act as a boost to the small business that suffered the shocks during the COVID-19 lockdown.
When the business recovery funds were announced, hopes were high that the small businesses that suffered distress as a result of the covid-19 lockdown would access funds and recapitalise. Unfortunately, only shillings 7 billion of the funds have been released out of the 200 billion shillings.
Priority was to be given to businesses that have between 5-49 employees and have an annual turn over of between shillings 10 to 100 million.
John Walugembe says there is limited awareness about the facility and lack of capacity to meet the loan requirements by the Small and Medium Enterprises.
“We have a general problem in this industry people are ignorant about this facility which is going to keep chasing hot air but all in the vain”, Walugembe said.
Walugembe says that banks intentionally present their highly priced commercial products to the borrowers and hide the government fund, which carries a 10 percent interest on reducing balance basis.
But in an effort to boost access, the federation of small and medium enterprises together with the Bank of Uganda, are set to roll out a countrywide awareness campaign to ensure that SMEs appreciate the small business recovery fund.
In November 2021, the ministry of finance and bank of Uganda announced operating guidelines for the small business recovery fund but the uptake remained low, even when the government relaxed loan requirements.