Training SMEs to appreciate financial institutions

The Private Sector Foundation Uganda Annual Members’ Days closed last week with Small and Medium Enterprises tapping into experiences from various field experts.

The PSFU organised event offers SMEs a platform upon which they can chat ways to access loans and make the best out of the credit facilities accrued from financial institutions. One of the major challenges of SMEs is accessing finance, something, which PSFU seems to be committed to addressing this year.

In an interview with Smart Money recently Mr Charles Ocici the Enterprise Uganda executive director said that without financing, SMEs cannot acquire new technologies, compete in the global market or establish linkages with larger firms.
He said sustainable growth for Uganda is directly related to the rate of enterprise creation and development.

However, he said this in turn depends on the ease with which small- and medium-sized enterprises can be involved, given their large contribution to the national economy.

Mr Gideon Badagawa the PSFU executive director said last week: “One of the critical constraints facing Ugandan SMEs is the lack of access to credit.” “In most cases SMEs tend to have challenges accessing finances, therefore by having these financial institutions interfacing with SMEs, the barriers that exist between the two will be eased,” said Mr Badagawa.

The three-day event brought together players in the financial sector to interface with SMEs who for various reasons, including ignorance and fear of dealing with financial institution do not get the best out of credit services.

According to Mr Badagawa, the Annual Member Days are intended to provide information, networking and capacity building for the membership by bringing together various business experts.

This year’s theme “Contributing to the growth of SMEs in Uganda through appropriate financial services, networking and effective business development support” was mainly geared to financial service provision and business development support for small businesses. The event also aimed at assisting SMEs have a better understanding of financial availability and business development support through effective access.

Many SMEs need guidance on the advantages and disadvantages of alternative forms of financing and how best to present their investment projects to potential financiers. According to information available in regard to the SME sector, this being a strategic sector for investment, most financial institutions, have come up with a wide range of products where SMEs can apply for the most appropriate settlement method that suit their income activities.

These services are competitively priced and offered in conjunction with solutions which meet SMEs risk mitigation needs. The SME sector is crucial in fostering entrepreneurship, competition and innovation that leads to sustainable growth. The event was therefore an opportunity for small businesses to access business development services including access to markets as well as assessing the ability to compete.

The event hosted at the Lugogo Main Exhibition hall, gave financial institutions an opportunity to exhibit their SME tailor-made products including; leasing, mortgage, transfer, insurance, savings and stock exchange products targeting small and medium enterprises.

An exhibitor Mr Leonard Kamuntu who runs a dry cleaning business in Kampala told Smart Money: “I have been running this business for about four years now; this event has offered me a platform where I can get more information, especially about available financing opportunities, business development support, information on investment and asset financing services offered by insurance firms.”

This event largely provided an opportunity for participants to discuss with bank officers, consultants, corporate managers and service providers who offer financial services and business development support to SMEs.

PSFU works to ensure that it undertakes capacity building for members through training and the provision of business development services. This event therefore fulfils that mandate. This year, exhibitors included; banks and Micro Deposit Taking Institutions, insurances, telecoms firms, leasing firms,consultancy firms and investment managers.

Brokerage firms, IT companies, marketing and advertisement agencies, property managers and real estate developers and importers of machinery and equipments also exhibited their services.

Ms Ruth Biyinzika Musoke, the PSFU director for membership services, told Smart Money that since the inception of the annual event three years ago, at least 500 jobs in the SMEs sector have been created. She said more progressive businesses have been opened after such events because they provide information and brings SMEs together with players in key service areas. Also, a session on how to tap the opportunities that the oil sector will unveil was conducted by players in the industries.

In essence, the experience that SMEs attained from the three-day event would have cost a fortune if they had decided to hire the services of a consultant. Therefore it is important for SMEs to get involved in such events that offer useful additions to their businesses.