The Ministry of Finance, Planning and Economic Development together with representatives of small businesses have agreed on the modalities of the disbursement of Shs200b Covid-19 stimulus package.
Henry Musaasizi, the State Minister for General Duties in the Finance ministry, says the funds will only be accessed by groups or individuals that have not accessed other government initiatives such as Emyooga.
Musaasizi says they hope the money will help the small scale businesses recover from the adverse effects of the Covid-19 induced lockdown.
He adds that government will contribute Shs100b to the fund while commercial banks willing to manage the funds on behalf of Bank of Uganda will contribute the remaining Shs100b.
According to John Walugembe, the executive director of the Federation of Small and Medium-Sized Enterprises (FSMU) in Uganda, they agreed with the Finance ministry officials to quickly draft a proposal on who will benefit from the money.
“We note with gratitude that we have been asked to share ideas on how best this package would be managed to effectively address the liquidity needs of these businesses countrywide,” Walugembe said on Monday.
“We call upon businesses with ideas on how this fund should serve their interests to share them with us to better inform the design of this package,” he added.
However, he said the Shs200bn fund will primarily target small businesses and not micro or medium sized businesses.
Walugembe explained that the government is already targeting micro businesses through the Microfinance Support Centre and medium sized businesses through Uganda Development Bank.
The fund will primarily offer credit and not grants. It will be managed by participating financial institutions under the supervision of the central bank.
Walugembe said, only businesses with the right documentation will benefit from this fund.