Kampala, Uganda: Small and Medium Enterprises (SMEs) now have more efficient access to credit thanks to a newly established technological gateway to European-based investors.
This follows the launch of the partnership between CapitalSavvy, Ugandan investment management and advisory firm, and Monetix, a Swiss-based financial technology development company, today in Kampala.
The joint venture is expected to support SMEs with innovative finance solutions key of which is an end-to-end digital solution that enables clients to apply for loans and get disbursements done on mobile money or their bank accounts, with minimal physical interaction.
“The only part where we interface with the client physically is at the point when we are doing due diligence on them. Otherwise, this is an end-to-end digital solution.
This solution aligns with the fact that the population’s use of mobile phones continues to grow. We have seen the success that mobile money has had over the years.
So, we want to align to that kind of convenience and growth,” said the CEO of CapitalSavvy, Reginald Tumusiime.
In addition, Reginald revealed that; “We have been able to integrate with banks. So, for facilities larger than what we can transact through mobile money, we are able to finance these SMEs or entrepreneurs directly through their bank accounts. All this is done online from application to appraising the loan, to approving it, to disbursement of the loan.”
According to Monetix’s CEO, Patrick Prinz, the partnership is an opportunity to build trusted access into a country with a lot of potentials.
“We have built a platform that allows borrowers to gain affordable access to financing. What we bring to the table as partners is a technology which allows for a much more efficient transfer of finances, as well as a source of funding which is seeking for positive yield,” said Patrick.
“We hope to transform the way business is done here. We are at the forefront of new technologies such as blockchain and specifically, with a focus on what utility this technology can bring.
We have already some ideas around different use cases that will enable the country to leapfrog,” added Patrick
In various developing countries including Uganda, SMEs account for approximately 90% of the private businesses resulting in more than 50% of employment and an estimated 40% contribution to GDP.
Given the unflattering unemployment figures that have been worsened by the pandemic and the associated mitigation measures, it is the SMEs that are again being looked upon to dust themselves up and lead the country to economic recovery.
Yet in spite of the immense expectations and contribute to the economy, financing remains a key challenge faced by most SMEs. It is a challenge that CapitalSavvy and Monetix are braced to tackle leveraging cutting-edge technology-based solutions.