Stanbic bank in partnership with the United Nations (UN) and other funding agencies have created an enterprise fund, Economic Enterprise Restart Fund (EERF) to provide low-cost financing to the informal sector to enable businesses recover from the negative impacts of the Covid-19 pandemic.
According to the press statement, EERF will provide cheaper funding to small and medium enterprises (SMEs), savings and credit cooperatives (SACCOs) as well as village savings and credit associations (VSLAs) to enhance their productivity and provide both digital & technical support in capacity building and institutional development.
EERF will also drive financial inclusion through the digital banking process and build economic activity sustainability that will help create employment opportunities, increase consumption, and avert poverty in the rural and peri-urban areas.
The fund was launched at Sheraton Kampala hotel by Stanbic bank chief executive officer Anna Juuko and UN resident coordinator, Rosa Malango.
“Our commitment to the Economic Enterprise Restart Fund is an opportunity for a new type of partnership between the UN and a leading private sector institution-Stanbic to adapt and respond to the impact of COVID-19 on the most vulnerable sectors of the economy and the most likely segments of the population to be left behind. This is a recipe to finance sustainable development and I look forward to having other partners join us,” said Malango.
It is hoped that the fund will provide the much-needed support to the vulnerable persons and help counter the effect of Covid-19 on the economy. The fund will also lead to the digitalization of the informal sector which then provide the government and policymakers the much-needed data for planning future interventions to increase household incomes and alleviate poverty.
Stanbic bank executive director, Emma Mugisha said the fund is intended to grow businesses, create employment, widen the tax base through improved economic activity, and increase export base and import substitution - a stepping stone towards reviving the economy.
Mugisha further noted; “The Economic Enterprise Restart Fund will improve the socio-economic status of women in rural areas by empowering them to become financially stable to establish or boost their small-scale businesses, procure their needed equipment and infrastructure for their economic activity, and enable take better care of their children and families.”
“Through the Stanbic business incubator, we shall provide financial literacy for SMEs, SACCOs, VSLA’s and enterprises to enhance the development and sustainability of their businesses. This will be integrated them into the financial sector, ensure that they have access to mainstream banking channels and credit facility, get digital and capacity building training,” Juuko added.
By transforming the lives and livelihoods of women and vulnerable groups in the rural areas, the EERF will be able to increase individual household income, ensure that every home has access to quality and affordable education and healthcare, clean energy, cooking, and water.
These are essential aspects of socio-economic development, personal wealth creation, and financial protection. As we begin the last decade of action to implement the Sustainable Development Goals, this partnership between Stanbic bank and the United Nations in Uganda will create a bridge for those in the informal sector during this COVID-19 times.