Stanbic Forum: Traders asked to be transparent when dealing with financial institutions
- Business Economy
executivewatch
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Paul Muganwa (2-L) posing for a photo with a team of panelists at the Trade Forum held in Kampala on Thursday last week
Traders have been called upon to exhibit transparency when dealing with financial institutions because that will ease their work.
Speaking at a business trade forum organised by Stanbic Bank, Paul Muganwa, the Head of Corporate and Investment Banking (CIB) said, “We recognize the important role that traders and suppliers play in this country and we pledge to continue supporting them to attain growth. However, whenever you are seeking financial assistance, it is imperative to treat your bank as a very important stakeholder that requires transparency.”
The forum was held under the theme, “Coming together to achieve procurement,” as a platform for traders and contractors in the supply chain to discuss avenues through which better working conditions can be achieved.
According to World Bank data, only 14.2% of the private sector in Uganda had access to credit in 2020. This figure is significantly below its Kenyan counterpart whose private sector access to credit stood at 32% in the same period.
Tanzania’s rate stood at 13.2%, South Sudan’s at 1.9%, while the Democratic Republic of Congo registered 7.5% private sector access to credit.
Small and Medium Enterprises are considered key engines of economic growth in developing countries. In Uganda, SMEs employ about 2.5 million people and make up about 90% of the private sector employment, while contributing to 20% of Gross Domestic Product (GDP).
However, access to finance remains difficult with just less than 40% of SMEs having access to bank loans while about 80% of them are unserved or underserved by financial institutions.
Emma Mugisha, the Executive Director and Head, of Business and Commercial Banking (BCB) said, “As a bank, we are usually the ones who are in between different traders; either it’s making a payment, or giving you a letter of credit, or confirming it, or making sure that the parties that have agreed to trade are actually following the different agreements at hand.”
