Why we need your help. ...
On March 30, Uganda went into lock down to contain the spread of Covid-19. Most of the country’s micro and small businesses halted operations due to increased operating expenses and their inability to implement preventative health measures. With limited savings, many micro business owners have eaten into their capital and are unable to re-open their businesses, the only source of their livelihood.
Supreme Produce UK is seeking donations to extend grants of at most GBP 160 each to over 100 struggling micro businesses in Uganda to enable them re-open for business. The funds will be channeled through Soutien Finance. Soutien Finance, a financial institution in Uganda, specializes in creating business owners through providing business management skills training, credit facilities, business monitoring oversight and resource mobilization. Soutien Finance (the Company) offers financing to micro businesses that would ordinarily not easily access loans from Banks as they do not have the required collateral such as land and movable property.
The Company has ongoing relationships with its customers over the life of their businesses. By maintaining contact with customers, early interventions save troubled businesses. It is this relationship that acts as collateral for micro businesses
Through training and financial support by Soutien, many youths and women have been living decent livelihoods in Uganda. One of the many success stories is that of Ms Ruth Nasolo a market vendor in Kiwatule market in Kampala Uganda who has seen her business grow from GBP 80 to GBP 240 in the last 2 years through the support of Soutien Finance. The single mother has been able to take care of food, health and other basic needs for her immediate family and elderly parents from the monthly profits of GBP 64 that she has been making from her business. However, due to the impacts of covid-19, she is no longer able to do business like she did before as she had to use her capital for family needs during the lock-down. Ms Nasolo a well trained and experienced business owner needs a stimulus grant to get back on her feet. See video for her story.
A recent rapid survey of businesses by the Economic Policy Research Centre (EPRC) in Uganda reveals that majority of micro businesses (58%) predict they will have to close within one to three months if the covid-19 pandemic persists and current lockdown restrictions are maintained. The survey also estimates that 3.8 million workers will lose their jobs temporarily while 625,957 risk losing their employment permanently if the threat of COVID-19 and associated containment measures persist for the next six months. In addition to the lower demand and higher costs of safety measures, responding businesses shared other worrying concerns, including lessened production and productivity, reduced supply of inputs, and credit and liquidity constraints. Indeed risks associated with COVID-19 have exacerbated pre-existing credit and liquidity constraints among micro, small, and medium enterprises (MSMEs). 69%of businesses surveyed reported a decline in access to credit, with 34% experiencing severe decline (a more than 50 percent decline in credit because lending institutions already consider them highly risky, and those businesses are more likely to become insolvent if COVID-19 persists and restrictions are maintained.
Soutien Finance has the experience and expertise to provide support to micro businesses to get back on their feet. Soutien will play a supervision and advisory role to help micro businesses rebuild their businesses and cope with the impacts of covid-19. Microbusinesses need grants now, otherwise they risk taking loans they will not be able to pay, returning them to poverty. We are therefore seeking your support in form of donations to raise at least GBP 16,000 to help over 100 micro business owners regain their dignity as they take care of themselves and their families.
How the money will be spent.....
Microbusinesses in Uganda operate on an average capital base of GBP 120. With this capital, the businesses make an average monthly net profit of GBP 40 to take care of their families. Out of a grant of GBP 160 to each business, Soutien Finance will disburse GBP 144 directly to the business owners. Soutien Finance will use GBP 16 for supervision and finance coaching. Finance coaching equips micro business owners with knowledge about finance to help them run strong sustainable businesses.
Why this cause means so much to us...
Supreme Produce UK relies on micro businesses in Uganda to get the best produce for the UK market. One of the core business objectives of Soutien Finance Limited is to provide flexible financial services to low income micro and small enterprises i.e. the 42% excluded from regulated Tier 1, II and III financial institutions in Uganda. They provide a channel through which poor households that lack collateral securities can access a micro-loan to invest in their micro and small enterprises. They tailor financing to suit client needs, repayment cash flows and tenor. Your donation therefore is at the core of what they stand for in our quest to alleviate poverty in Uganda.
We thank you for the support you will provide in helping micro business owners and their families regain their dignity in life by being able to take care of themselves from their business proceeds.