Vincent Kiyingi is the manager at the Business Partners Internation (BPI) -Uganda. He spoke to the Independent's Isaac Khisa about financing SMEs in the country.
What is your leadership style as a manager?
My leadership style is not definite but I use different styles depending on the time and type of task at hand. We run a lean model therefore it's easy to build consensus with staff and agree on common action points to achieve the set targets.
As Business Partners International East Africa (BPI EA) you seem to be targeting mainly Small and Medium Enterprises and upcoming entrepreneurs for your credit. What are your key drivers for targeting SME's and not big companies?
At Business Partners, we pride of over 30 years of experience of offering financial solutions to SMEs and we understand traditional financiers refrain from lending to this target market because of the perceived risk associated with SMEs, or prefer not to deal with the complexities of doing business with a family management team rather than a board of members. This is however, the area that BPI specialises in, and the exact service offering that we are working to expand to entrepreneurs across Africa.
You have been in this market for more than a year now. What is your assessment of SME's demand for loans?
There is a high demand for financing by SMEs but again many SMEs fail to access the desired financing from different financiers due to unacceptable form of collateral, perceived business risk because of the start-up nature of the business among other challenges.
SMEs and small entrepreneurs access to finance remains a challenge not only in Uganda but also across the African continent. How are you trying to address that challenge?
We are specialists in risk financing for family-owned companies and those enterprise owners whose businesses are doing well but cannot attract the full commercial lending support that they need from traditional banks. That means we are willing to take on more risk based on the skills and dedication of the entrepreneur, viability of their business and integrity of the entrepreneur. We are therefore extending funding to an entrepreneur with the above attributes but lack the adequate security to their borrowings. Similarly, our due diligence process is thorough, tried and tested.
What makes you different, in terms of loans structure and interest rates from commercial banks in offering loans to SME's?
Our financing structure is flexible and incorporates a moratorium period to allow the business to generate cashflow to start repaying the loan. Our pricing is in line with the market and we also offer value -add services that include interest free funds through our Technical Assistance (T/A) programme to assist with mentorship of entrepreneurs and addressing the soft challenges in the business.
What are the criteria for an SME firm to access your loans?
It's a simple process, the entrepreneur is required to submit a business plan after which they meet with our investment officer for free initial discussion. Each application is assessed based on the viability of the business, integrity and experience of the entrepreneur. We develop a customised investment and added value solution for the business. Capital and security are not necessarily required for an application to be accepted, as each investment is individually structured according to customer's needs.
What other services do you offer to your customers rather than extending loans?
We offer a Technical Assistance Programme which provides value-added services for the entrepreneur (business owner) ranging from accounting support, marketing plans and mentorship programmes to support the business to transcend its frontiers.
What is your footprint in Uganda and in the continent?
BPI was established in 2004 as a subsidiary of Business Partners Limited, to apply the investment model refined in South Africa to other African countries. Funds have been established in Kenya, Malawi, Namibia, Rwanda, Zambia and Uganda. The management of the Funds is organised to implement the principles that Business Partners has developed to manage investments in SMEs in Africa over the last 30 years.
What are some of the challenges, if any, does Business Partners International East Africa (BPI EA) face in its daily operations?
At Business Partners, we note that many SMEs operate informally with no proper record keeping, lack formal structures in their businesses. This poses a risk in the event that the entrepreneur is not around their businesses can not survive.
What is the future outlook for BPI EA in Uganda and the region?
The outlook for BPI EA is positive based on the fact the East African region economy is growing and SMEs contributing highly to the growth of the forecasted GDPs. Therefore, Business Partners will continue with supporting these SMEs in the region with the desired financing and mentorship services through our value add Technical Assistance programme.