53 enterprises apply for small business recovery fund

A total of 53 small business enterprises have so far applied for the Small Business Recovery Fund.

The Government and commercial banks earmarked a total of sh200b to provide low credit support to small and medium enterprises at a low-interest rate of 10%.

Government has contributed sh100b and commercial banks sh100b.

The Small Business Recovery Fund is one of the stimuli packages that the Government has come up with to resuscitate the economy from the effects of COVID-19.

A statement from the Bank of Uganda indicates that as of March 3, 2022, five enterprises out of the 53 that had applied were approved and 13 enterprises have their approval pending.

With the approved five enterprises, a total of sh60m has been paid out to them.

Bank of Uganda has explained that an individual or group owning a small business employing between five to 49 workers and with a capital of between sh10m and sh100m will be eligible to borrow.

With a maximum grace period of one year, the repayment period agreed upon for the loans is between six months and four years.

Where there is no minimum set that one or a group can borrow, the maximum that can be borrowed is sh100m and collateral security will be required for any borrowing.

In the budget for the next financial year of 2022/2023, the government has planned to allocate an additional sh100b which will raise the fund to sh300b.

On how one can access the funds, the Bank of Uganda stated that eligible borrowers can access the loans through the participating financial institutions which include all the commercial banks, licensed credit institutions, and micro-finance deposit-taking institutions regulated by the Bank of Uganda.

“The participating financial institutions are responsible for assessing potential borrowers in line with the Fund’s guidelines and their credit policies and thereafter disburse the funds to them,” Bank of Uganda stated.

Source: New Vision

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