The Federation of Small and Medium Enterprise (FSMES) has asked government to initiate modalities through which small businesses can access part of the Shs200b earmarked for refinancing recovery of mainly small businesses.
Speaking to journalists in Kampala early this week, Mr John Walugembe, the FSME executive director, said there was urgent need to help small businesses respond to a decline in the economy largely due to Covid-19.
“If government is really committed to helping [small business] as stated in its National Budget Strategy for the 2022/23 financial year, then as representatives of small businesses, we expect modalities to fasten access of funds,” he said.
Small and medium businesses play an important role in fostering innovation, wealth and create jobs.
At least more than 2.5 million Ugandans are employed by small and medium business, accouting for approximately 90 per cent of the entire private sector.
Small and medium businesses generate more than 80 per cent of manufactured output that contributes 20 per cent of the gross domestic product (GDP), according to government statistics.
However, small and medium enterprises continue to have a number of challenges among them limited access to capital, worsened by Covid-19 disruptions.
Mr Walugembe also noted that government should find a way through which economic stimulus packages are managed by private sector as opposed to government entities that have little knowledge of how the private sector operates.
Stimulus packages are currently managed through Uganda Development Bank, prioritising financing of mainly businesses that are involved in import substitution and replacement.