Access to finance for small and medium-sized enterprises: a case for creating an enabling legal environment for venture capital financing in Uganda

Abstract

Venture Capital funds have the considerable potential of meeting the unique financing needs of SMES in Uganda since they have the capacity to invest relatively high risk capital and also work closely with the businesses by providing strategic, managerial and technical advice to boost growth. SMEs are major backbone of most economic activities in Uganda through massive creation of employment and revenue generation. In attempt to ensure sustainability of SMEs, the government has ensured the increasing number of financial institutions and government initiated programs such as Youth Venture Capital Funds (YVCF), SME funds and Livelihood Programs among others to increase credit accessibility by SMEs on favorable credit terms.