By Our Reporter
Over 500 small businesses affected by the COVID-19 pandemic are expected to benefit from-low cost financing by Centenary Bank, under the special Small Business Recovery Fund. The eligible businesses will be able to access financing from the bank to help them recover from the challenges caused by the pandemic and its associated standard operating measures that were instituted between 2020 and 2021, to contain the spread of COVID-19.
Commenting on the fund, Ms. Beatrice Lugalambi, the General Manager Corporate Communication and Marketing at Centenary Bank said, “The COVID-19 pandemic greatly affected the economy leading to the closure of some businesses and stagnation others. Our Small Business Recovery Fund is therefore intended to bolster the activities of many small businesses that faced the adverse effects and wish to get their businesses back on track.”
To be eligible for the fund, Lugalambi said, the prospecting small business must be employing between 5-49 people with an annual turnover of UGX 10 million to 100 million and total assets of between UGX 10 million to 100 million. The funds can only be borrowed once without top-ups and multiple borrowing from other participating Financial Institutions is not allowed.”
According to a report by the International Finance Corporation (IFC) on the COVID-19 effects on SMEs, 89% of the businesses reported a decrease in turnover on average by 49%. 73% of the Small and medium enterprises have current cash flow problems while two-thirds of them experienced lower demand for their products and services because of the pandemic. The report also indicated that 90% of the businesses have received bank funding with restructured loans being the most important means of support.
“Centenary Bank has set up conditions that we believe are favorable for the eligible small business funding, where an entity can borrow up to UGX 100 million. The borrowing businesses will be given a minimum of 6 months and a maximum of 4 years to repay the loan, including a one-year grace period,” Lugalambi explained.
“All legal businesses can access this fund except those that have already been financed under the Agricultural Credit Facility,” Lugalambi added.
Small business owners are encouraged to seek financing options from the bank to enable them to kick start their operations following the full reopening of the economy. The fund is accessible at any Centenary Bank branch countrywide.