In a significant boost to Uganda’s small and medium enterprises (SMEs), SHONA Capital and Cornerstone Asset Managers have announced a partnership to inject $500,000 (UGX 1.84 billion) into the country’s high-growth businesses.
The investment, secured through Cornerstone’s Private Wealth Management division, aims to provide much-needed capital to Ugandan SMEs, strengthening local industries and creating jobs.
The initiative is backed by Kuo Sharper Initiative (KSI), which guarantees the investment, demonstrating a collaborative commitment to fostering economic growth in Uganda.
By mobilizing funding from high-net-worth individuals and institutional investors, the partnership seeks to address the persistent financing gap for SMEs while mitigating risks associated with foreign currency-denominated funding.
SHONA Capital specializes in providing flexible debt financing to SMEs, particularly in agriculture and healthcare, to drive sustainable economic growth.
The firm complements its financial support with business management expertise from seasoned industry professionals.
Meanwhile, Cornerstone Asset Managers offers diverse investment solutions, including wealth management, unit trusts, and advisory services, catering to both individual and institutional investors.
Bridging the SME Financing Gap
Despite SMEs contributing nearly 80% to Uganda’s GDP and employing a majority of the workforce, access to financing remains a significant hurdle.
A 2021 World Bank report estimated the SME financing gap in Uganda at $4.7 billion (UGX 17.219 trillion), highlighting the urgent need for local investment solutions.
Although commercial bank lending to SMEs has increased, many businesses still struggle to access formal financial support.
Ivan Mandela, CEO of SHONA Capital, emphasized the importance of local investment in driving economic growth.
“By mobilizing local capital, SHONA Capital and Cornerstone Asset Managers are providing sustainable funding sources for entrepreneurs to scale their businesses, create jobs, and strengthen the national economy. This initiative is also a call to action for other local institutions to recognize the immense potential within Uganda’s SMEs.”
Simon Mwebaze, Managing Director of Cornerstone Asset Managers, echoed this sentiment, stating, “SMEs are the backbone of Uganda’s economy. By partnering with SHONA Capital, which has deep expertise in local markets, we can strategically allocate capital where it will have the greatest impact. This investment aligns with the government’s economic growth strategy and is expected to generate both financial returns and positive social outcomes.”
Strengthening Uganda’s Investment Landscape
Uganda’s private equity and venture capital sectors remain underdeveloped compared to regional counterparts, leaving many SMEs reliant on foreign capital that exposes them to currency fluctuations and external shocks.
SHONA Capital and Cornerstone Asset Managers’ approach offers a more stable, long-term financing model by leveraging local investment channels.
As Uganda’s financial sector evolves, initiatives like this partnership could pave the way for greater investment in SMEs, ultimately driving economic resilience and sustainable development.
SHONA Capital and Cornerstone Asset Managers plan to expand their collaboration, further mobilizing capital to empower Uganda’s business landscape.
