MICRO AND SMALL ENTERPRISES (MSE) RECOVERY FUND
The Micro and Small Enterprises (MSE) Recovery Fund was launched on February 24, 2022.
The fund aims to facilitate access to finance directly to 50,000 MSEs (at least 40% women and 30% youth). This is with an objective to shorten the recovery trajectory of youth and women-owned and operated businesses from the COVID-19 pandemic effects, by providing their businesses with much-needed capital injections. In turn, this is expected to jumpstart the economic livelihoods of entrepreneurs to secure and create job opportunities for young women and men in Uganda.
This is important because micro small and medium enterprises (MSMEs) are a significant driver of employment in Uganda. According to the Annual Labour Forces Survey 2018/19, more than half of the working population (65%), is employed in the informal sector. When the COVID-19 pandemic struck, individuals and households that worked for and with MSEs were worst hit. The fund is targeting this sector and as MSEs recover from the effects of the pandemic, young Ugandans will access dignified and fulfilling work.
The MSE Recovery Fund is a five-year USD 20 million initiative under the Young Africa Works strategy, established in partnership with the Mastercard Foundation and Financial Sector Deepening Uganda with an aim to jumpstart the economic livelihoods of entrepreneurs to secure and create job opportunities for young women and men in Uganda.
Objectives of the MSE Recovery Fund
- To facilitate access to finance directly to 50,000 MSEs (70% women and young people) through 25 Tier III and Tier IV financial institutions. This fund will aim to protect at least 100,000 jobs at risk and cause a multiplier effect in credit extended to MSEs over five years.
- To support in building resilience of financial service providers through digitization of their loan processing workflows. The Fund will also support financial institutions to access credit reference bureau services.
- To attract more long-term institutional capital into the sector to address shocks and sustainability for systemic growth.
- To embed continuous learning within the grassroot financial service providers across the country, through encouraging best practices, which will create confidence and encourage innovations around product development, and service delivery.
MSE Recovery Fund in Numbers
out of the 30% target
out of the 40%TARGET
the 100,000 target
*Data as at October 20, 2023
MSE Recovery Fund Partners
The MSE recovery fund is being implemented in partnership with:
ASIGMA, the facility manager, who are ensuring effective management of the funds. This will include supporting the Investment Committee in defining and implementing the fund’s investment strategy and selection criteria, appraising and shortlisting applications from participating institutions, presentation to the Investment Committee, monitoring, and reporting the use of funds by participating financial institutions in line with the objectives.
gnuGrid Credit Reference Bureau, whose task is the implementation of the credit referencing services to support improvements in credit information markets. Their task is to onboard Tier 4 institutions onto the CRB platform and build their capacity to use data in making credit decisions.
MicroSave Consulting is handling the monitoring and evaluation aspects of the intervention. Designing the methodology and developing tools to carry out baseline surveys on FSPs and MSEs to provide a yardstick for continuous measurement of progress towards achieving targets.