Stanbic Bank Uganda has partnered with the United Nations and other funding agencies to create an enterprise fund that will provide low-cost financing for informal sector businesses to enable them recover from the impact of the COVID-19 pandemic.
Dubbed the Economic Enterprise Restart fund (EERF), it will aim to revive the worst-hit sectors of the economy by providing cheaper funding to small and medium enterprises (SMEs), savings and credit cooperatives (SACCOs) as well as village savings and credit associations (VSLAs) to enhance their productivity.
Focus will also be on providing both digital and technical support in capacity building and institutional development.
According to a statement from Stanbic Bank and the UN, the EERF will drive financial inclusion through the digital banking process and build economic activity sustainability that will help create employment opportunities, increase consumption, and avert poverty in the rural and peri-urban areas.
Speaking during the launch at Sheraton Kampala Hotel, Stanbic Bank Chief Executive, Anna Juuko said, the fund has identified key individual, businesses and groups that were made financially vulnerable by the pandemic, who will receive low-cost finances from the bank to allow them to boost their business capital, increase daily income or cash flows and empower them to become financially stable.
“Our commitment to the Economic Enterprise Restart fund is an opportunity for a new type of partnership between the UN and a leading private sector institution-Stanbic to adapt and respond to the impact of COVID-19 on the most vulnerable sectors of the economy and the most likely segments of the population to be left behind. This is a recipe to finance Sustainable Development and I look forward to having other partners join us,” said UN Resident Coordinator, Rosa Malango.
This intervention in support of vulnerable populations, will help counter the effect of Covid-19 on the economy while the digitalization of the informal sector through this initiative will provide the Government and policymakers the much-needed data for planning future interventions to increase household incomes and alleviate poverty. According to the Executive Director of Stanbic Bank, Emma Mugisha, the Fund is intended to grow businesses, create employment, widen the tax base through improved economic activity, and increase export base and import substitution thus a stepping stone towards reviving the economy. She further noted; “The Economic Enterprise Restart Fund will improve the socio-economic status of women in rural areas by empowering them to become financially stable to establish or boost their small-scale businesses, procure their needed equipment and infrastructure for their economic activity, and enable take better care of their children and families.”
“Through the Stanbic Business Incubator, we shall provide financial literacy for SMEs, SACCOs, VSLA’s and enterprises to enhance the development and sustainability of their businesses. This will be integrated them into the financial sector, ensure that they have access to mainstream banking channels and credit facility, get digital and capacity building training,” Juuko emphasized.
Stanbic said in their statement that by transforming the lives and livelihoods of women and vulnerable groups in the rural areas, the EERF will be able to increase individual household income, ensure that every home has access to quality and affordable education and healthcare, clean energy, cooking, and water. These are essential aspects of socio-economic development, personal wealth creation, and financial protection. As we begin the last decade of action to implement the Sustainable Development Goals, this partnership between Stanbic Uganda and the United Nations in Uganda will create a bridge for those in the informal sector during this COVID-19 times.