Govt rolls out sh200b recovery fund for small businesses hit by Covid-19

fund for small businesses

The Ministry of finance planning and economic development has rolled out the small business fund recovery project worth shs.200 billion.

This is intended at empowering the small and large business communities that were affected by the COVID-19 pandemic.

Recently, President Yoweri Museveni directed for the establishment of a micro small, and medium enterprises fund to provide liquidity assistance to businesses that were affected by the COVID-19 pandemic.

According to, the permanent secretary Ministry of finance, planning and economic development Ramathan Ggoobi, the ministry undertook extensive consultations with various stakeholders including the Bank of Uganda, post-Bank (u) limited, Housing Finance Bank and Pride microfinance limited (MDI), the federation of Small and Medium Enterprises Association and SEATINI Uganda all aimed at the development and appropriate recovery intervention for businesses to save vulnerable jobs.

Addressing journalists at the ministry, Ggobi noted that there are mainly four binding constraints to Uganda’s economic development based on findings which Include the cost of capital, cost of transport, cost and efficiency of power and cost and adaptation of technology.

He however noted that the fund will provide concessional loans to eligible borrowers to support business recovery especially to the potential of their production.

The president directed the ministry of finance and economic development together with the Bank of Uganda following his pledge on 30th July 2021 to establish the funding and inform the country on how to access it, said the Minister for finance, planning, and economic development Mati Kasaijja.

He added that the government has set up a small business recovery fund (SBRF) in partnership with Commercial Banks , Microfinance Deposit-Taking Institutions (MDIs) and credit institutions across the country to provide affordable loans to businesses that have experienced hardships due to the covid-19 pandemic.

Matia Kasaijja, the minister of finance noted that the government will provide an initial amount of sh100bn for only the commencement of the fund which shall be administered by the Bank of Uganda in conjunction with eligible participants to extend loans to eligible small businesses.

However, he explained that the participating financial institutions will match the government contribution by sh 100 billion to form a consortium pool of Sh 200 billion he explained.

“As a government, we do not need interests from Ugandans or businesses which benefit from the loans starting with a minimum of sh1 million and a maximum of sh100 million but the private financial institutions shall require their interests based on the terms of agreement and multiple borrowings shall not be allowed,” Kasaija said.

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