Uganda unveils new facility to help its SMEs recover from COVID-19

In Uganda, the COVID-19 pandemic has presented unprecedented challenges for small businesses, much like in the rest of the world. To address these challenges and support the recovery of small and medium-sized enterprises (SMEs), the United Nations Development Programme (UNDP) has partnered with Stanbic Bank Uganda to launch a new facility aimed at empowering young entrepreneurs. Elsie Attafuah, the UNDP resident representative for Uganda, discussed the initiative and its significance during an interview with CNBC Africa. Uganda boasts one of the youngest populations globally, with 23% of its citizens aged between 18 and 30 years. Despite this demographic dividend, the country faces significant underemployment and unemployment rates. Many startups struggle to survive beyond their early years due to limited access to financing, coaching, and capacity building. The added impact of the COVID-19 pandemic has further exacerbated the challenges faced by micro, small, and medium-sized enterprises (MSMEs) in Uganda. In response to these obstacles, the UNDP and Stanbic Bank Uganda have introduced the Youth for Business Innovation and Entrepreneurship facility. This initiative comprises three interventions tailored to support young entrepreneurs and SMEs. The first intervention is an Innovation Fund and Growth Accelerator designed to provide grants of up to $40,000 to young individuals with innovative business ideas. The second facet of the facility is the Entrepreneur Challenge Fund, which offers blended financing options including grants and concessional loans below market rates. Stanbic Bank Uganda has allocated $200 million to support young business owners through this fund. The ecosystem platform on innovation and entrepreneurship constitutes the third component of the facility. This platform aims to connect young entrepreneurs, provide knowledge-sharing opportunities, and offer mentoring and capacity-building support. Attafuah emphasized the importance of focusing on youth and SMEs in post-COVID recovery efforts, highlighting the need for tailored support and investment in young people's potential. She underscored the sustainability and impact objectives of the facility, aiming to create 20,000 new jobs and re-skill over 50,000 young entrepreneurs. The partnership between the UNDP and Stanbic Bank Uganda aligns with the global 2030 agenda for sustainable development, particularly in promoting inclusive growth and economic empowerment for youth. Attafuah highlighted the role of partnerships in sustaining the impact of the facility, emphasizing the need for collaboration among various stakeholders including the private sector, government, development partners, and international financial institutions. The focus on innovation and incentivizing young entrepreneurs remains central to the sustainability strategy, ensuring that the facility fosters a conducive environment for business growth in Uganda. The UNDP's accelerator lab and business incubation initiatives aim to provide ongoing support and skills development for young business owners over an extended period. By leveraging existing platforms and promoting a holistic ecosystem approach, the UNDP and Stanbic Bank Uganda seek to create a sustainable framework that enables youth entrepreneurship and economic resilience in Uganda.