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Uganda Dev’t Bank To Finance 2 Million Women Entrepreneurs With Affordable Micro Loans

Women MPs inspecting a flower farm owned by the UWEP-funded Rwentobo Women group in Mbarara

Uganda Development Bank (UDB) has offered to help 2 million women in business access financing at more affordable cost than those offered under the currently available products.

This is aimed at responding to the complaints that available sources of business finance are largely un-affordable by most women entrepreneurs, who are mainly small scale operators.

Women and other small and micro enterprises say they have not benefited from the previous government packages because they are not tailored to their needs. The government has virtually made the UDB, the main source of cheap and patient capital for entrepreneurs, recapitalising it regularly.

However, among other business groups that have criticised UDB’s performance, are the SMEs which accuse the bank of setting terms that are not affordable by most of the entrepreneurs.

They include; a minimum loan portfolio of 100 million shillings, books of accounts of at least 2 years as well as evidence of registration with the Uganda Registration Services Bureau.

Now, UDB has reached a memorandum of understanding with the Uganda Women Entrepreneurs Association Ltd, UWEAL, under which the beneficiaries will get between 50 and 100 million shillings in loans.

The chairperson UWEAL, Barbara Ofwono says this will go a long way in answering their concerns especially due to the low interest rates of 10 to 12 percent, compared to the more than 20 offered by commercial banks and microfinance institutions.

She says women who cannot afford to borrow 50 million be grouped so that the loan amount is divided into smaller portfolios for the individual borrowers. “So we have agreed with UDB and they are willing to finance 2million women and we’re now in the process of preparing the women.

There’s going to be an economic boom because 2 million women getting funding to be able to revamp and grow their businesses, is a great thing economically,” says Ofwono.This comes as UWEAL leads other entrepreneurs to mark the Month of the Women Entrepreneur, under the theme: Against All Odds for Women Entrepreneurs.

Ofwono says the main huddle for them is the fact that there is no record on the number of women entrepreneurs in Uganda since most of them are not registered. She however says that UWEAL itself has 65 registered groups and this will be a starting point for dispersing the UDB finances, but adds that women cooperative societies will also be used.

The organization has also embarked on a program aimed at registering all the women in business, for proper planning and advocacy, according to UWEAL Chief Executive, Connie Kakihembo.

“We are reaching out to all women entrepreneurs thought the help of their leaders, to know what they are doing and where. So this is part of the profiling. It’s an ongoing exercise,” she says.

The women business leaders hope to use the month to seek answers to the shortcomings facing the Entrepreneurs, including access to finance, access to markets especially under the COVID-19 pandemic situation, access to government services and opportunities like paying taxes and participating in public procurement among others.

Uganda Revenue Authority acknowledges that some of it’s innovations have not been favourable to women taxpayers, citing the process of getting a Tax Identification Number as well as the URA portals which are not very user-friendly.

Assistant Commissioner, Research and Innovation at URA, Irene Mbabazi Irumba says they are trying to make their systems as easy as possible, taking into account the shortcomings of women and other MSMEs in using digital technology. She advised that women should embrace the electronic invoicing system or EFRIS, which she says, is easy to use and solves many issued like registration and accounting record-keeping.

Women entrepreneurs have also been left out of most government contracts because they cannot compete ably with the other bidders.

This is also related mainly to the fact that their companies are not registered of have no up-to-date financial records.

The Public Procurement and Disposal of Public Assets Authority, PPDA says women account for less than 1 percent of the procurement market in Uganda, which must be corrected.

Sheila Nakiwala, the head, advisory services at PPDA says the authority has taken note of this and are devising means to improve on the situation.

“There are many opportunities, but the women lack information on how and where to find these opportunities. Because they’re always in the papers and now they’re on our website,” she says.

Nakiwala adds that it’s the common issues like lack of adequate funds and record-keeping which hinder women from progressing in the sector.

“So we’re training them on where and how to get the information, but also how to prepare and file a winning bid.” 

-URN

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