Don’t Borrow Money and Go Away – Former Minister Kiwanuka Tells SMEs

Former finance minister Maria Kiwanuka has warned small and medium-sized enterprises (SMEs) and all start-ups to refrain from acquiring money from financial institutions and run away.

Kiwanuka was delivering his keynote address on Wednesday as part of the Prudential Organized Program, Knowledge Series under the theme; Investment and financing opportunities for small businesses to unlock Uganda’s potential.

The senior adviser to the president and economist said there is no such thing as free finance and there is a need to respect every party involved without taking obstacles for granted.

(LR) John Walugembe, Executive Director, Federation of Small and Medium Enterprises, Uganda (FSME), Tony Otoa, Managing Director, Stanbic Business Incubator, Hon Maria Kiwanuka, Former Minister of Finance, Dr Gudula Naiga Basaza, Managing Director Gudie Incubation Center , Maxima Musimenta, CEO, Livara Cosmetics and Tettah Ayitevie, CEO, Prudential Assurance Uganda pose for a group photo during the Knowledge Series Breakfast held at the Imperial Royale Hotel in Kampala on Wednesday, May 25 2022.

“First of all, we’re all stakeholders, there’s no free lunch for everybody. There’s no free funding. You don’t have to say, let me take this money and run away. To grow, we have to stop thinking about making money and disappear,” Kiwanuka said.

She said that to maintain integrity, the borrower must also respect the rule of law and take advantage of the regulations in place.

“We must respect the rule of law. Borrowers should respect lenders and lenders should respect borrowers,” she said.

Kiwanuka recognized the need for affordable financing for sustainable projects, as financing for small and medium enterprises is an engine of growth in Uganda, which requires a joint effort by funders and fundees.

She said borrowers should do a thorough self-analysis before seeking financing. What type of financing they need, not just what is available.

According to Kiwanuka, money is what drives the economy, so financiers need to take a long look to see how funds will be disbursed.

“If your SMEs are in tune with inelastic demand, as a borrower you can never go wrong because people need to eat and to dress,” Kiwanuka added.

(L-R) Tony Otoa, Managing Director, Stanbic Business Incubator, speaking at the Knowledge Series Breakfast held at the Imperial Royale Hotel in Kampala on Wednesday, May 25, 2022 as Dr Gudula Naiga Basaza, Managing Director of Gudie Incubation Centre, Maxima Musimenta, Chief Managing Director of Livara Cosmetics and John Walugembe, Executive Director of Federation of Uganda Small and Medium Enterprises (FSME) look on.

According to Kiwanuka, SMEs would transform the economy and improve national revenues and taxes. She says if the government can do less external borrowing and support Saccos in Fintechs, support partnerships and foreign finance,

Prudential’s managing director, Tetteh Ayitevie, said that 55% of the youth population in the world is in business and Uganda is privileged to be over 70% in the youth age bracket.

He said that as Prudential, they look forward to working with the young, tech-savvy population.

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