Uganda Bank Supports SMEs

UGANDA – Stanbic Bank Uganda has pledged to continue supporting the SME sector in the country.

Stanbic Bank’s Head of SME banking Uganda, Ms Annette Kihuguru says SMEs are drivers of economic growth, making them essential to the Uganda economy because they contribute significantly to GDP and employment.

In an interview published in Uganda’s publication The Daily Monitor Kihunguru is quoted as saying;

“Stanbic Bank is very conscious about the significant opportunities in the SME market and over the years has been developing strategic focus and developing solutions to the existing challenges in order to fully provide financial products and services that are critical to their growth”.

Despite the challenges in the SME sector, Kihunguru says SMEs have become a strategic target to banks.

“They are the fastest growing especially in the emerging markets and they are central to economic development. Stanbic Bank Uganda has been trying to understand the particular needs and preferences of SMEs and is continuously developing tailored approaches to overcome the historical challenges of high risk and cost to serve this market,” she said.

Kihunguru said an important factor in improving the way SMEs do business is ensuring they focus on bookkeeping accounts, so as to monitor the trend of their business.

“There is need to record every expenditure related to the business and not only purchases and sales,” she said.

Kihunguru noted that poor management is to blame for the failure of nearly 50 percent of SMEs in Uganda adding that Proper debt management is critical for the success of SMEs.

“Business owners need to constantly grow their investment, only borrow enough for the business (no funds diversion), plough all money borrowed into the business, be prompt to pay debts and do not mix private debts with business debts,” she said.

Early this year Stanbic Bank secured a US dollars 30 million credit PROPARCO, a subsidiary of the French Development Agency, to provide long-term finance to SMEs.

Stanbic Bank is one of the sponsors of the Top 100 Mid-Sized company survey which rewards top performing SME’s. More than 180 mid-sized companies submitted their credentials.

Photo by AuldHippo