By Ben Musanje
23rd Nov 2021
The Government has established a Small Business Recovery Fund -SBRF to provide affordable financial loans to businesses that have experienced hardships due to the measures undertaken to control the spread of Corona virus in the country.
During his address to the nation on the status of Covid-19 on July 30, 2021, President Yoweri Museveni pronounced that the government should establish a Micro Small and Medium Enterprises Fund to support businesses that have been affected by Covid-19.
Now, partnering with the Commercial Banks, Microfinance Deposit Taking Institutions -MDIs and Credit Institutions across the country, the government has set up an initial amount of 100billion shillings for the commencement of the Small business recovery fund which shall be administered by Bank of Uganda in conjunction with eligible Participating Financial Institutions -PFIs to extend loans of eligible small businesses.
Matia Kasaija, the Minister for Finance, Planning and Economic Development says that PFIs will match the Government contributions by 100bnshs to form a consortium pool of 200bnshs and the fund which will be used primarily to provide financial loans to small businesses that have suffers financial distress during the lockdown.
However, John Walugembe the Executive Director for the Federation of Small and Medium Enterprises -FSME embraces the initiative and encourages people with small businesses to go for these funds.
According to some of the requirements, all small businesses operated by individuals, groups, partnership and companies, employing 5-49 people and with annual turnover of 10million – 100mshs are eligible under the fund.
Interest rate chargeable by the PFIs shall not exceed 10% per annum on a reducing balance basis while facility fees charged by PFIs yo eligible borrowers will not exceed 0.5% of the total loan amount and shall be a one-off charge.