New finance product to support SMEs launched by Bank of Africa
05/06/2017 - New finance product to support SMEs launched by Bank of Africa
Bank of Africa has launched a new financing product that aims to provide cheap financial credit services to young entrepreneurs.
The new financing scheme code named “Kulakulanya Business” Literally means (Support the development of Business) will support only the Small and Medium Enterprises whose owners are facing the challenge of accessing credit to finance their Enterprises.
Bank of Africa Executive Director Bernard Robinson Magulu said the new product will support the development of SMEs in the country which constitutes the highest percentages in the country’s private sector.
“SMEs constitute over 90% of the private sector and employ over 2.5 million people. This is a large sector to explore since a huge chunk of revenue and workforce is left out to traditional financing available from lenders. That is why as a financial institution we have identified the need to have business finance loan to provide for working capital for the SMEs in 48 hours,” he explained during the SME Business forum in Kampala.
He explained that the platform will only support sectors which contributes much to the country’s Economy such as Agriculture where the focus is on value addition and agro business , Tourism among other sectors such construction.
Bank Of Africa, General Manager Business Development, Claver Serumage explained that SME Business forum acts as an avenue of engagement between the entrepreneurs and other government agencies which support business development. He noted that many entrepreneurs in the country are still ignorant about the importance of business registration.
Claver further disclosed that very few businesses can expand without taking a leap and securing a loan. So it is vital for the financial sector to come up with soft financial products which can support the SMEs in the country since they play big role in the National Economy.
The managers observed that without supporting the growth of the SME,s in the country this will continue keeping the country’s Economy operating below potential & growth projection of 4.5% as it was hoped in the financial year 2016/17 may not be achieved.