260,000 businesses to benefit from World Bank project

The World Bank approved financial aid to help government mitigate the effects of Covid-19 and support new economic opportunities. PHOTO | FILE

What you need to know:

  • The World Bank approved financial aid to help government mitigate the effects of Covid-19 on private sector investment and employment and support new economic opportunities.

About 260,000 Micro, Small and Medium Enterprises (MSMEs) in Uganda will benefit directly from the Investment for Industrial Transformation and Employment project. Of these, 40,000 should be women-led micro enterprises, following the the World Bank Group’s approval of $200 million to Uganda. 

Officials involved in the project said larger-size firms will also benefit indirectly, for instance, from financing that will mitigate the risks associated with late payment and nonpayment.

Mitigating Covid-19 effects

The World Bank approved financial aid to help government mitigate the effects of Covid-19 on private sector investment and employment and support new economic opportunities, including in refugee and hosting communities. 

The money is in form of grants and soft credit which attracts no interest rates on payment with a grace period as well. 

Approving the financial in Washington DC in late December 2021, the World Bank said of this amount that has been approved, $96 million (Shs338.6b)  is a credit line from the International Development Association (IDA) while $104 million (Shs367b) is an IDA grant, of which $50 million (Shs176b) is from the Window for Host Communities and Refugees.

The Investment for Industrial Transformation and Employment (INVITE) project has four components: mitigating the impact of Covid-19, with a focus on the manufacturing and exporting sectors that are driving economic transformation; creating new productive and transformative assets that seek to mitigate the financial sector’s risk aversion; thereby improving the availability of credit to MSMEs and providing longer-term finance for productive investments.

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