ASIGMA To Work with Financial Sector Deepening (FSD) Uganda In The Implementation Of The Micro And Small Enterprises (MSE) Recovery Fund

Financial Sector Deepening (FSD) Uganda, in partnership with the Mastercard Foundation, launched a five-year Micro and Small Enterprise (MSE) Recovery Fund under the Young Africa Works program, to boost 50,000 enterprises recovering from the effects of the pandemic.

The US$20 million (approximately UShs70 billion) fund will shorten the recovery process of youth and women-owned businesses that employ and sustain the livelihood of millions of Ugandans. The fund will directly secure 100,000 at-risk jobs while enabling 150,000 additional opportunities for dignified and fulfilling work for young people.

The Micro and Small Enterprises (MSE) Recovery Fund in numbers.

The Recovery Fund will be implemented in partnership with ASIGMA, the facility manager, who will ensure effective management of the funds. ASIGMA will advise FSD Uganda & the Technical Investment Committee (TIC) on the Investment Strategy, criteria of participating financial institutions, undertake due diligence & financial monitoring of the participating financial institutions and treasury management of the funds to ensure capital preservation.

The Managing Director of ASIGMA, David Nanambi Wakyiku said that “When you think about this programme, it has components to do with evaluating financial institutions, ensuring the portfolio is being monitored and managed, undisbursed funds are invested to ensure that for any credit risk that is realised the losses are covered by investment gains and digitizing financial institutions. This is the embodiment of the firm and the capacities we have built over the last couple of years and we are immensely proud to be part of the implementation of this fund.”

Youth and women-led MSEs in the program will receive credit worth between US$26 (UShs100,000) and US$3,000 (UShs10 million), which will be delivered through participating microfinance institutions and SACCOs (Tier III and Tier IV financial institutions).

By the end of this program, we would like to see more women and youth succeeding in their businesses – these are the Micro and Small Enterprises – we would like to see them grow their businesses and get a livelihood out of this fund – Daniel Mutumba, Deputy Team Leader MSE Recovery Fund – Facility Management

In addition to supporting MSEs, the fund will build the resilience of grassroots Financial Service Providers (FSPs) by digitizing workflow processes and strengthening their capacity to attract more long-term institutional capital to address shocks and ensure the sustainability of systemic growth. “We intend to build the resilience of the financial institutions we are going to partner with, in a way that focuses on using digitization and technology to improve their loan processing workflows to better serve their clients,” said Christina Lunkuse, Investment Manager at ASIGMA.