Banking experts tip SMEs on investment opportunities
Women and youth-led SMEs in particular, have to deal with several barriers that cause many of them to abandon their entrepreneurship dreams. PHOTO / FILE
To record growth in the this financial year, starting July 1, Small and Medium Enterprises (SMEs) should align their businesses with the government’s priorities outlined in the FY 2024/25 Budget amounting to Shs72 trillion.
This is believed to address some of the challenges that SMEs continuously grapple with ranging from taxes to Electronic Fiscal Receipting and Invoicing System (EFRIS) with the hope that their business can recover from the effects of COVID-19 and contribute to the growth of the economy.
As a way of ensuring increased uptake of the Small Business Recovery Fund (SBRF) that was started two years ago to provide soft-loans to SMEs and to further support their growth, the government has injected about Shs1.6 trillion this financial year.
This can be accessed through two programs implemented by the government namely; Generating Growth Opportunities and Productivity for Women Enterprises (GROW) worth $217 million (Shs824 billion) and Investment for Industrial Transformation and Employment (INVITE) worth $210 million (Shs800 billion). The funds are intended to support women-owned enterprises and value addition for exports.
Speaking during the Equity bank’ post budget engagement organised on July 4, Mr Anthony Kituuka, the Managing Director of Equity Bank revealed that the 2024/2025 budget presents several opportunities for SMEs to thrive but for them to benefit, it will depend on their area of investment. If the investment is not within the budget priorities, then the SMES may have to refocus their plans.
He noted that most SMEs that outlived the Covid-19 pandemic transformed their operations with robust financial management practices like adopting accounting software.
“Opportunities in agro-industrialization, tourism development, mineral development including oil and gas, science, technology, and innovation. Key allocations have been made towards infrastructure development, digital transformation, and access to finance," Mr Kituuka said noting that the government's focus is on improving the business environment, enhancing productivity, and fostering innovation.
He further noted that budget allocation for SME financing will improve access to affordable credit, enabling SMEs to expand their operations, invest in new technologies and improve competitiveness.
This he said is possible by providing tailored financial products and advisory services to help SMEs grow through offering the right partnerships.
During the SME 2024/25 post budget, it also emerged that there is considerable mix up over who qualifies for a tax reprieve, something the SMEs want clarified.
The technical director of Lithum Solar (U) Ltd, Mr John Paul Musonge, highlighted the challenges faced by small and medium-sized enterprises (SMEs) in Uganda.
"These challenges include tax-related issues, importation difficulties, banking and credit financing obstacles, and compliance challenges with the introduction of the Electronic Fiscal Receipting and Invoicing System (EFRIS)," Mr Musonge said.
Despite these challenges, he noted that some banks are already offering trade financing, providing SMEs with immediate access to funds based on their business needs.
