Uganda has been severally named by numerous research organisations as the most entrepreneurial country in the world. In 2017, at least 28.8% of Ugandans were involved in a business; big or medium or a startup.
The growth of the informal sector can be attributed to the high unemployment figures but also to the creativity and the ingenuity of Uganda to start businesses – although most the business startups don’t see their first anniversary.
This is because of the lack of financial capital, cheap and accessible credit for borrowing and the lack of knowledge to manage success.
Research done by Twaweza East Africa has indicated that at least 35% of Uganda – one on every three citizens – have borrowed money to finance their needs. What is more shocking is that they borrow mostly from informal saving groups (30%) and SACCOs (23%) as opposed to banks (13%) and other avenues.
This can be explained by high-interest rates and colossal security that banks require to belt out a loan of any amount. What is more revealing is that 33% of the borrowers intended to use the money for business purposes.
Twaweza researched on the relationship between credit access and business creation. In their Sauti za Wanachi survey, majority of the respondents said that they would start or boost their business if they got at least Shs350,000 from the government.
There was a good number said they would buy farm inputs, livestock and/or cater for household needs such as school fees, food and durable goods. A close analysis of the choices given can explain what Ugandans need to thrive, manufacture and become competitive like their counterparts in the region.
It’s estimated that 77 per cent of Ugandans are below the age of 30 and 64 per cent of those who are aged 18-30 are unemployed. This means that if there was a deliberate investment towards supporting indigenous business and seed fund dedicated to financing startups, Uganda would see better results from her entrepreneurial youth.