Government is close to finalising an agreement with local banks through which funds from a stimulus package for Small and Medium Enterprises meant to revive businesses affected by the Covid-19 pandemic.
The Minister of Finance, Mr Matia Kasaija, says they are making final touches on the final agreements that they will sign with the commercial banks on how the SMEs will access the money.
The banks will match government’s Shs100 billion bringing the total package to Shs200 billion.
Mr Kasaija has tasked small businesses to have fixed premises and the required registration requirements in order to be eligible to borrow the money from the banks.
The interest rate of the stimulus package is expected not to be exceed 12 per cent.
Mr John Walugembe, the Federation of Small and Medium Enterprises executive director, says the stimulus package will primarily offer low interest credit and not grants, which will be disbursed through participating financial institutions.
This is because government already [has programmes that target] micro businesses through the microfinance support centre. It [also has arrangements that target] medium sized businesses through the Uganda Development Bank,” he says.