SMEs have no capacity to change to green businesses – report

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SMEs have no capacity to change to green businesses - report
SMEs have no capacity to change to green businesses - report

Africa-Press – Uganda. Low levels of financing will make it hard for most micro, small and medium enterprises to transition to green business, according to a report.

The report by Advocates Coalition for Development and Environment, a public policy research and advocacy think tank, notes that micro, small and medium enterprises lack the financial support to transition into local green enterprises.

The failure, the report indicates, presents major challenges in terms of controlling pollution and environmental degradation for Uganda.

The report, which was presented at the weekend during the National Policy Dialogue for Local Green Enterprises in Kampala, also notes that globally, 65 million enterprises or 40 percent of micro, small and medium enterprises in developing countries, have an unmet financing need of $5.2 trillion to transition into green businesses.

In Uganda, micro, small and medium enterprises employ more than 2.5 million Ugandans, which is almost 90 per cent of the entire private sector.

However, the report estimates that more than 90 percent of micro, small and medium enterprises in Uganda lack financing to enable them transition into green enterprise.

“Poor access to finance remains the single biggest issue,” reads the report titled: A contextual financial analysis of micro, small and medium enterprises.

Dr Arthur Bainomugisha, the Advocates Coalition for Development and Environment executive director, said during that whereas transitioning is the only way to go, there should be deliberate incentive, beginning with government interveniens through financing agencies such Uganda Development Bank to fund green businesses at a lower interest rate.

Environmentalists across the globe have been pushing for adaptation of the green economy, arguing that every business must start working towards reduction of carbon emissions.

Mr John Walugembe, the Federation of Small and Medium sized Enterprise executive director, said government should create a special desk that is responsible for evaluating and financing green business.

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