Kampala — Financial Sector Deepening (FSD) Uganda, in partnership with the Mastercard Foundation, today launched a five-year Micro and Small Enterprise (MSE) Recovery Fund under the Young Africa Works initiative, to boost 50,000 enterprises recovering from the effects of the pandemic.
The US$20 million (approximately UShs70 billion) fund will shorten the recovery process of youth and women-owned businesses that employ and sustain the livelihood of millions of Ugandans. The fund will directly secure 100,000 at-risk jobs while enabling 150,000 additional opportunities for dignified and fulfilling work for young people
MSEs in the program will receive credit worth between UShs 100,000 and UShs 10 million, which will be delivered through participating microfinance institutions and SACCOs (Tier III and Tier IV financial institutions).
In addition to supporting MSEs, the fund will build the resilience of grassroots Financial Service Providers (FSPs) by digitizing workflow processes and strengthening their capacity to attract more long-term institutional capital to address shocks and ensure the sustainability of systemic growth.
The Executive Director of FSD Uganda, Ms. Rashmi Pillai, said that FSD Uganda prides itself in working closely with like-minded partners such as the Government of Uganda and the Mastercard Foundation to find solutions that benefit all Ugandans.
"The MSE Recovery Fund was a result of the FSD Uganda 5-waves COVID-19 studies. The studies show that while most people returned to jobs by late 2020, the quality of jobs declined, and net pay was still below pre-pandemic levels for nearly 73% of surveyed adults.. Individuals and households that worked for and with MSEs were worst hit. That’s why the facility we are launching today isintentionalin targeting micro and small enterprises whose credit needs fall between UShs 100,000 to UShs 10 million. We are confident that this facility will be an excellent complement to the Government of Uganda’s Small Business Recovery Fund," she added.
Speaking on behalf of the Mastercard Foundation, Adrian Bukenya, the organizations’ Country Head, Uganda, added: "MSMEs are a significant driver of employment in Uganda. So, as the Foundation looks towards enabling 3 million young Ugandans to access dignified and fulfilling work by 2030, we know we can only get there by addressing the residual effects of the pandemic on MSMEs. This facility is about standing with the individuals and businesses that are the backbone of our economy as they bounce back.
The Permanent Secretary and Secretary to the Treasury, Mr. Ramathan Ggoobi, commended FSD Uganda and the Mastercard Foundation for this initiative, which he said will bolster Uganda's effort to accelerate growth and revive the economy. "I am pleased that these organizations are targeting MSEs that employ most Ugandans. The fund will boost our effort as a government and will help us to cover more ground and support our people to become self-reliant amidst the challenges of the pandemic," he said.
The Recovery Fund will be implemented in partnership with ASIGMA, the facility manager, who will ensure effective management of the funds, and gnuGrid, who will be tasked with the implementation of the credit referencing services to improve the processes of selected financial service providers.
About FSD Uganda
Financial Sector Deepening Uganda (FSD Uganda) is a company limited by guarantee promoting greater access to financial services in Uganda. FSD Uganda seeks to develop a more inclusive financial sector focusing on low-income individuals, particularly smallholder farmers, women, youth, and forcibly displaced people and micro, small, and medium enterprises (MSMEs). With support from FCDO, FSD Uganda facilitates product innovation, conducts research, helps to promote and improve policy, laws and regulations that shape the financial sector in Uganda. For more information on the Foundation, www.fsduganda.or.ug
About the Mastercard Foundation
The Mastercard Foundation works with visionary organizations to enable young people in Africa and Indigenous communities in Canada to access dignified and fulfilling work. It is one of the largest private foundations in the world with a mission to advance learning and promote financial inclusion to create an inclusive and equitable world. The Foundation was created by Mastercard in 2006 as an independent organization with its own Board of Directors and management. For more information on the Foundation, please visit www.mastercardfdn.org.
About Young Africa Works
Young Africa Works is the Mastercard Foundation's strategy to enable 30 million young people, particularly young women, across Africa to access dignified and fulfilling work. Africa will be home to the world's largest workforce, with 375 million young people entering the job market by 2030. With the right skills, these young people will contribute to Africa's global competitiveness and improve their lives and those of their communities. The Mastercard Foundation will implement Young Africa Works in 10 African countries in collaboration with governments, the private sector, entrepreneurs, educators, and young people. The first phase of countries identified by the Foundation are Rwanda, Kenya, Ghana, Senegal, Ethiopia, Uganda, and Nigeria.
For more information, contact:
Lillian Akot
Communication Specialist
FSD Uganda
lakot@fsduganda.or,ug
+256 776720100
Eleni Constantine White
Lead, Program Communications Uganda
Mastercard Foundation
ewhite@mastercardfdn.org
