A total of 28 Ugandan agribusinesses have received grants worth $30,000, in addition to six months’ worth of technical assistance, business development and market development support to scale their businesses.
The agro-processing and agro-industry value chain start-ups received the support as part of the National Social Security Fund (NSSF) and Mastercard Foundation’s Hi-Innovator entrepreneur support programme.
NSSF’s deputy managing director, Patrick Ayota, said, “The Hi-Innovator is about taking a chance on great business ideas while they are at their most vulnerable stage of their business cycle, and at a point where no financial institution is willing to invest in them.”
“We also targeted businesses in the agriculture value chain such as agro-processing, agro-industry, and service support. We chose agriculture specifically because the sector employs about 73 per cent of the population and has the potential to create more jobs,” he added.
According to the National Development Plan III (2020-2025), government has emphasised the need to focus on enhancing value addition in key, including agriculture, which has a high potential to generate employment and have a positive multiplier effect on other sectors.
Despite this, financial institutions have been reluctant to advance credit to the agriculture sector due to inadequate collateral, the industry being mainly rain-fed. As such, it is easily affected by adverse weather conditions, in addition to seasonal price fluctuations.
The Covid-19 pandemic also saw banks decreasing their appetite for lending due to an increase in the number of business closures. This in turn affected their ability to honour credit obligations.
In addition to limited access to low-cost loan financing, a 2018 Uganda Entrepreneurial Ecosystem Initiative survey by Aspen Network of Development Entrepreneurs (ANDE) found that small businesses are also negatively affected by limited access to information about enterprise establishment and sustainability.
The Hi-Innovator programme seeks to address these challenges by bringing together entrepreneurs, business incubation services, development partners, among others, in an ecosystem that supports small and growing businesses by Ugandan entrepreneurs to mature
As start-ups capitalise on building commercially viable ventures, they should utilise pitching platforms to scale up their businesses.