Africa-Press – Uganda. The Financial Sector Deepening Uganda (FSDU) has unveiled a survey that digs into the roadblocks hindering private capital flows into the country’s emerging markets particularly into small and medium enterprises (SMEs).
The findings, revealed persistent disconnect between available investment capital and the investment readiness of local enterprises.
While private capital holds promise for Uganda’s economic acceleration, several barriers are stalling deal closure and frustrating investor efforts.
Despite being ranked as one of the most entrepreneurial countries in the world, Uganda has one of the highest business failure rates with many micro, small and medium enterprises collapsing before witnessing their first anniversary attributing it to lack of access to capital, market and stringent policies.
While releasing the report calls for targeted reforms to align investor mandates with local realities, strengthen SME investment readiness, and create enabling conditions for local capital to participate in private markets dominated talks.
Key among the Limitations Included Mandate Constraints a major hurdle identified in the rigidity of investment mandates.
Investors, especially those tied to large funds and global partners, are limited by strict criteria around sectors, geography, and ticket sizes.
Uganda’s SME ecosystem is still growing, and many businesses haven’t yet reached the level of sophistication or scalability needed to absorb significant investment.
This mismatch between the scale of available capital and the readiness of local businesses results in missed opportunities and stalled growth.
The report calls for targeted reforms to align investor mandates with local realities, strengthen SME investment readiness, and create enabling conditions for local capital to participate in private markets.
It also recommends developing financial instruments to manage currency risk and improve investor confidence.
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