Strategies that can help save your business and plan for the unexpected

Due to the pandemic, many businesses have experienced new and significant operational challenges such as inadequate cash flow, decreased demand, and supply chain disruptions resulting from lockdown restrictions. According to the Economic Policy Research Center (EPRC), 50% of businesses in Uganda had to close operations at least temporarily for an average of over three months. These challenges were unprecedented and have made it clear how disruptive a crisis can be. Most companies were unprepared and as a result, some have closed operations permanently. Others have struggled to get back on their feet.

 

 

Due to the pandemic, many businesses have experienced new and significant operational challenges such as inadequate cash flow, decreased demand, and supply chain disruptions resulting from lockdown restrictions. According to the Economic Policy Research Center (EPRC), 50% of businesses in Uganda had to close operations at least temporarily for an average of over three months. These challenges were unprecedented and have made it clear how disruptive a crisis can be. Most companies were unprepared and as a result, some have closed operations permanently. Others have struggled to get back on their feet.

 

Here is where a business continuity plan can be a critical tool enabling businesses not only to survive but potentially to thrive even during a crisis. A business continuity plan is a document that outlines how a business will continue operating during an unplanned disruption. It guides businesses on how to reassign resources and communicate effectively internally and externally, all key components to maintain operations even during challenging times.

 

Because developing a business continuity plan may be a new concept for small business owners, in September, the COVID-19 Business Information Hub focused on guiding entrepreneurs in their development. We had insightful discussions with stakeholders and businesses who implemented a variety of business continuity strategies during the pandemic, and here is what we learnt:

 

Conducting a risk assessment: The first thing that every business owner should do is assess the risk and vulnerability of their business. This can be easily done using a tool that the International Labor Organization (ILO) provides free of charge. The ILO also outlines a six-step process to develop the business continuity plan with a key focus on four main elements (People, Process, Profits, and Partnerships). We spoke with John Kakungulu Walugembe of Federation of Small and Medium-Sized Enterprises-Uganda (FSME), who explained in detail what the 4Ps stand for and how businesses can use the six-step plan to their advantage. (click here to access the special interview with John Walugumbe).

 

Determining critical activities: Business owners need to define critical activities needed to continue to operate during a crisis. Businesses should immediately identify actions to take based on the risk exposure. Lilian Katiso of Mau and More, a company that sells potted plants, recognized that watering plants was critical to mitigate the risk of losing her inventory due to withering. The business decided to purchase a motorcycle to facilitate one staff to do the watering during the lockdown.

 

Establishing an internal communication plan: A communication plan outlines how teams and employees may best communicate with each other to support the company’s objectives. It helps increase communication frequency and promotes the dissemination of information about what is happening within the company and the employees. Toddler’s Gold  implemented a communications plan including regular meetings to discuss business targets and understand staff welfare. As a result, their sales grew during the lockdown.

 

Embracing technology and digital platforms: Technology helps to support business operations during challenging times. When regular work arrangements were disrupted, and we saw a shift to remote work, Rajab Mukasa, Director at Pique Nique Ltd, adopted mobile money and the use of agents to complete his banking activities. It allowed the company to order by phone and pay suppliers remotely instead of using cash.

 

The disruptions caused by COVID-19 have set a new preparedness benchmark and demonstrated that small businesses need to continuously adapt and evolve their strategies to better prepare for future risks. Joseph Walusimbi a national coach and trainer with the International Trade Center (ITC), an agency of the United Nations, encourages entrepreneurs to embrace business continuity plans to prepare for uncertainty. He also highlighted the potential need for external financing to implement specific activities. Businesses should seek financing options focusing on recovery, innovation, adaptation and sustainability, such as the Economic Enterprise Restart Fund available at Stanbic Bank Uganda or credit guarantee schemes that shift risk from the private to the public sector.

 

 


Learn how Toddler's Gold, a store focused on clothing and accessories, has successfully navigated pandemic disruptions

In a recent interview, Rosemary Tusabe, the owner of Toddler’s Gold, shared how she successfully navigated her children’s apparel and toy business through pandemic disruptions. Toddler’s Gold is an online store that was launched in 2018 with offices in Muyenga and employs six staff.

What was the impact of the lockdowns here in Uganda on your business?

We found it challenging to access our suppliers and customers during the first lockdown because of movement restrictions. So, we intensified our online trading and arranged delivery to our customers through boda-bodas. We found that our demand increased because children were home, and parents realized children needed more clothes now than when attending school. As a result, we ran out of stock.

After the government lifted the first lockdown, we stocked more items for clients to prepare ourselves if there was a second lockdown. So, when the second lockdown happened, we were well prepared.

 

How did you navigate these challenges?

During the first lockdown, because we could not access our suppliers, we identified similar businesses that were struggling to sell because they lacked an online presence. They agreed to supply us on a cash basis arrangement.

Having increased our marketing online, we also generated many inquiries from expectant mothers, so we introduced a new service line called personal baby shopping for expectant mothers. Through this service, we agree with our customers on their shopping needs and pricing and then buy and deliver the items. They can do all of this from the comfort of their homes.

 

What business continuity strategies were most helpful as you navigated pandemic disruptions?

Since we continued to sell our products online, we were able to keep all our staff working. We also introduced regular meetings to discuss how to hit targets and understand staff welfare during this time. As a relational capital-focused business, we realized that rewarding and motivating our staff during the crisis would keep them happy and, in turn, serve the customers with a smile. So, we continued to pay full salaries for staff and also provided them with relief items.

We also introduced a new program, the winning mom’s mastermind. The program advises mothers on financial planning, conscious parenting, and personal growth and development. Although the company had set to start this program in 2 years, the lockdown presented us an opportunity to speak to mothers who were now at home and needed advice on parenting and personal development.

 

What other business continuity strategies are you implementing to survive any further disruptions?

The pandemic has taught us to prepare for a rainy day, and here are some of the strategies we are implementing:

The business has established an emergency fund to help us with any unforeseen circumstances that may arise in the future. We consistently put aside a certain amount of money from our profits that we don’t touch for any cash obligations that occur. I recommend this practice to other business owners as part of their continuity strategy.

We regularly engage our customers to understand their needs and problems to tailor our products and services. We hope that these interactions will enable us to get new product ideas to help diversify our offering.

Finally, we have embraced technology and digital platforms to seize online customers since most people use their phones and laptops to shop. The technology helps us understand customer purchase habits, and then we offer them a convenient shopping experience.

 

Learn more about our products on:

Instagram:     @toddlersgold

Facebook:     @toddlersgold

WhatsApp:   0776511499

Call:             0709728624/ 0776511499


Learn from Lilian Katiso, Proprietor of Maua and More, on the strategies she implemented to ensure business continuity during crisis

Learn from Lilian Katiso, Proprietor of Maua and More, on the strategies she implemented to ensure business continuity during crisis

The COVID-19 Business Info Hub spoke with Lilian Katiso, Proprietor of Maua and More, to understand how she managed to facilitate growth of her business during the pandemic. Maua and More, a seven-year-old company whose name means flowers and more, is located in Kampala and offers unique potted plants and garden accessories.

When the lockdown started and the mall where her business is located closed, Lilian quickly identified risks to her business and came up with strategies that would provide the best chance at business survival. These centered around four main areas:

 

Products

Lilian’s first concern was to ensure her products were cared for to avoid potential losses. The plants must be watered every 3 days, so Lilian discussed with her staff and came up with a plan. The business obtained a bicycle for one staff member who was willing and able to ride to the outlet every Monday, Wednesday, and Friday to water the plants.

 

Suppliers

Maua and More relies on both local and international suppliers, most of whom require payment within three days of delivery. Knowing that this would be challenging during the lockdown, Lilian negotiated with international suppliers for a thirty-day credit period, which provided the business with enough time to sell products and use that funding to make payments before placing another order.

 

Team communication

Realizing that lockdown would make communication among her team more difficult, Lilian set up a WhatsApp group for easy collaboration. The group allowed the team to have regular discussions about ideas and issues as they arose in real-time. This was complemented by monthly progress meetings to discuss what went well, what didn’t go so well, and how to improve.

 

Customer engagement

Before lockdown, Maua and More engaged customers by posting live photos of the products at the shop. With the lockdown, Lilian shifted focus to posting about plants and their maintenance. These posts generated inquiries, and because people were home and could tend to their gardens, it also led to further sales. After the lockdown was lifted, the business saw sales double compared to those made pre-lockdown. Customers also asked for new varieties of plants, so Lilian began further diversifying her products.

 

With these strategies firmly in place, Maua and More was able to weather the challenges brought about by the lockdown and even achieve business growth. However, an increase in demand meant the need to purchase some products in bulk from a new supplier, which posed another challenge for the business. Unable to negotiate credit due to the newness of the business relationship, Lilian needed to come up with sufficient cash to cover the deposit, insurance, import tax, and transportation costs. To avoid facing liquidity issues, she approached a bank and requested financing to support the purchase. The business qualified for an unsecured loan and was able to go ahead with the purchase.

 

In addition to thinking about how some of the above strategies could apply to your own business, Lilian wants other entrepreneurs to know that business owners should not fear spending when it comes to ensuring business continuity. During the most recent lockdown, Maua and More purchased a motorcycle and scooter to ensure staff could get to the shop. While this required laying out cash for these purchases, it also meant three staff could get to work and generate revenue. Additionally, as customers increasingly look to making purchases online, spending for digital marketing can help reach more people in a shorter time. Lilian boosts her posts on Facebook with paid advertising to promote new stock as it comes in. The strategy works, so she has created a budget for this kind of advertising.

 

For more information, contact Maua and More at: 

WhatsApp: 0777014020

Email: mauaandmore@gmail.com


Learn how SME owner Rajab Mukasa implemented business continuity strategies to remain afloat during Covid-19 lockdowns

Learn how SME owner Rajab Mukasa implemented business continuity strategies to remain afloat during Covid-19 lockdowns

Rajab Mukasa, Director of Pique Nique Links Limited, shared with the Covid-19 Business Information Hub how his company managed disruptions caused by lockdowns and plans for business recovery. Pique Nique Links Limited is located at Lakeside crescent in Luzira and currently employs five staff. The company is engaged in bid management, organizing corporate events, and supplying general merchandise to enterprises.

What happened to your business during the first lockdown?

During the first lockdown in March 2020, we were unfortunate because our business came to a standstill. We didn’t expect the lockdown, so we had spent all our money to deliver on client orders but did not have cash flow from client payments. As a result, we closed for the whole length of the lockdown, and our staff had to find their means of survival. Upon easing the lockdown, customers began paying for the supplies we had made, at which point we re-opened business.

After re-opening, the company came up with a plan to only do partial deliveries to clients and agree on a short-term credit period. It was challenging to negotiate with the big corporations on these terms, but they eventually agreed. The plan enabled the business to build a cash reserve to continue operations during critical times, which prepared us for the second lockdown.

 

How did you manage to continue operating during the second lockdown?

During the second lockdown, we were better prepared. We learned that communication needed to be a key part of our business continuity strategy, so we actively engaged our clients and suppliers. We first informed our customers that we could not supply their orders because it was nearly impossible to obtain goods since suppliers’ businesses were closed. Customers understood the situation, and we also kept communicating regularly to alert them when we received some items available for supply. Given that we traditionally pay suppliers in cash, it was also critical to discuss alternative payment options with them. We used mobile money and bank accounts through agent banking, the new methods that allowed us to order by phone and pay remotely.

Another contingency plan that we put in place was to source jobs and consultancy work for our company directors, which funded the company’s operations despite reduced cash flow. This was important to help the company’s operations to stay afloat.

 

What other business continuity strategies are you implementing to survive any further disruptions?

First, we want to ensure that we have a cash reserve in our bank account at all times to be used only to finance critical activities during tough times. We hope this can shield the company against liquidity challenges resulting from delayed customer payments.

We are also thinking about diversifying into other ventures to widen our business model and obtain alternative income. In the past, events management was our primary source of income; given the current circumstances, other sources of income such as the supply of goods will be a priority.

The pandemic disruptions have been a learning experience for the business. The critical lesson here is about building a sustainable value relationship between clients and suppliers. Relationships require transparency and two-way communication where you share openly about the challenges and develop solutions to propel the relationship ahead.


Learn how you can prepare your business to remain stable under disruption.

As part of the Covid-19 Business Info Hub’s focus this month, we spoke with Joseph Walusimbi, a national coach and trainer with the International Trade Center (ITC), an agency of the United Nations, to understand his perspective on business continuity planning. With ITC, Joseph builds SMEs’ capacity to export their products and services and advises enterprises at different life cycle stages to grow their businesses sustainably.

Business continuity planning helps SMEs ensure that critical business aspects remain stable under disruption. 

Joseph walked us through an example of the disruption faced by local agriculture exporting companies, which were hit hard by the pandemic last year when flights were cancelled and airplanes grounded. The European market that typically consumes products shipped by these producers was primarily indoors and could not consume the products. Unfortunately, most exporters were unprepared. Companies did not know how to manage human or financial resources in the face of such unprecedented disruption or continue servicing debts without cash flow. Business continuity plans would have ensured these businesses had measures ready to address many of these challenges.

These challenges have not been unique to one sector or type of business, indicating that business continuity planning is essential whether you are a grocery store owner, an enterprise in the information technology (IT) sector, or have a 4-acre garden producing for an export company.

 

There are six areas of focus that SMEs should keep in mind when developing business continuity plans.

  1. Designate one focal person to identify disruptions and disseminate information.This person should be in touch with relevant authorities to get accurate and regular updates for sharing with the team and other stakeholders.
  2. Identify products or services that are essential for business survival.These should be products or services that generate the most revenue for the business and must be made readily available for customers when needed.
  3. Prioritize key customers and engage them regularly. Customer engagement should involve timely communication about product availability, price changes, and delivery options, for example. Engagement should not be a one-way street – ask for feedback from your customers and incorporate it into your operations.
  4. Establish policies to protect employee’s health and safety. Companies must ensure that all employees understand what preventative measures they need to follow to stay healthy, whether on-site or remotely.
  5. Analyze your supply chain and engage critical suppliers. Regularly speak with suppliers and understand what products might be challenging for them to supply in case of disruption. Understand what changes they may need to make in operations. Understand whether your suppliers can also identify an alternative supply chain in case the main chain breaks down.
  6. Modify service delivery to respond to disruptions.Enterprises should explore flexible and convenient delivery options available that can respond to movement restrictions. These may include services that allow customers to order and pay online; then, you arrange delivery.

 

Finally, businesses should exercise and review the plan. Businesses can do this by taking the time to check if the plan is helping in achieving the objectives; if it is not, you may make some adjustments.

 

SMEs should identify potential funding options for business continuity activities. 

After developing a business continuity plan, SMEs may identify a need for external financing to implement specific activities. Businesses should seek financing options focusing on recovery, innovation, adaptation and sustainability, such as the Economic Enterprise Restart Fund available at Stanbic Bank Uganda or credit guarantee schemes that shift risk from the private to the public sector.  Agriculture Business Initiative (aBi) finance offers credit guarantee products through its partner financial institutions from which SMEs can benefit during challenging times.

 

Business continuity planning is critical to prepare for uncertainty caused by disruptions and must be part and parcel of SMEs’ strategic plans. If SMEs embrace business continuity planning, we will see more transformation and business resilience in the next two or three years.

 

For business support, call 0704006900 or send an email to walusimbij@gmail.com


Developing a Business Continuity Plan for Your Enterprise

The COVID-19 Business Info Hub spoke with John Kakungulu Walugembe of the Federation of Small and Medium-Sized Enterprises-Uganda (FSME) to understand the importance of developing a business continuity plan for enterprises and how this helps to build resilience during challenging times.

A business continuity plan can be defined as a document that outlines how a business will continue operating during an unplanned disruption in service. It contains contingencies for business processes, assets, human resources, and business partners – every aspect of the business that might be affected.

John K. Walugembe is the Executive Director of FSME, the umbrella/business association that brings together over 112,000 micro, small and medium-sized enterprises across 20 sectors in the country. Here’s what John had to say about the importance of business continuity plans in light of circumstances brought about by disruptions like the pandemic:

 

“Many businesses don’t have business continuity plans and do not know why they need to develop them.”

 

The impact of the pandemic on the MSME sector is unprecedented. Many businesses are closed, others have limited demand, and many are struggling to pay their staff. Businesses face challenges they have never encountered before and disruptions at overwhelming levels. So, “when we are talking about business recovery and resilience, we are trying to ensure that businesses get back to their pre-pandemic level” of operations. Business continuity plans can help businesses in doing just that. However, many entrepreneurs do not know what they are or how to go about putting them together.

 

FSME worked with International Labor Organization (ILO) to assist 200 MSMEs to come up with a business continuity plan according to a six-step process developed by the ILO.

 

FSME used the ILO’s six-step process for putting together a business continuity plan, which starts with an assessment of risk.

To assess the level of risk and vulnerability faced by a company, business owners need to focus on the 4Ps below and can assess their level of risk using the link included above.

People

How are your workers and their families affected by COVID-19?

Processes

How are the everyday operations of your business affected?

Profits

To what extent is your income and revenue affected?

Partnerships

How is the environment around your business affected by COVID?

Next, businesses must follow six steps as outlined below.

Step 1: Identify your key products or services.

Step 2: Establish the objective of your plan.

Step 3: Evaluate the potential impact of disruptions on your enterprise and workers.

Step 4: List actions to protect/minimize risks to your business

Step 5: Establish contact lists for non-physical activities (WhatsApp calls, Zoom meetings etc.).

Step 6: Maintain, review, and continuously update your plan.

 

“SMEs should also network and reach out for help.”

 

Although business continuity plans help answer questions about how your business can continue operations in moments of crisis, companies need to be agile and adapt plans to changing circumstances. One way to do this is by reaching out for support from organizations like FSME and to other business development service providers. Businesses can also reach out to their networks for ideas and support.

FSME is keen to support SMEs when and where possible, so please reach out to the organization via Tel at 0774147864 or via email at info@fsmeuganda.org or at john.walugembe@fsmeuganda.org


Are you struggling to manage your business due to pandemic disruptions? Business continuity and recovery planning can help you stay afloat.

The COVID-19 pandemic has caused disruptions for small and medium enterprises (SMEs) in Uganda and the rest of the world. As Uganda comes out of a second lockdown, many small businesses are wondering how to re-launch operations and what they will do to stay afloat should further preventative measures cause additional disruptions. We’re here to help.

This month, the COVID-19 Business Info Hub will focus on a key strategy business owners can implement to plan for future disruptions – business continuity and recovery planning. Recent discussions with entrepreneurs and others in the SME ecosystem in Uganda have highlighted the importance of this strategy in the current environment. It was a key topic in a recent interview we conducted with Edward Katende, Chief Executive Officer of Uganda Agribusiness Alliance(UAA), and it came up during a discussion we had with Basil Mwotta, Chief Executive Officer of AgroDuuka Uganda Limited who shared the strategies he used that kept his business running despite challenges brought on by the lockdown.

Through discussions with experts and entrepreneurs with deep experience in this space, the COVID-19 Business Info Hub will focus on helping SMEs understand how to go about business continuity and recovery planning, including how to develop a plan, when and how to implement it, and where to access financing to cover key related expenses.

If you are interested in delving deeper into business continuity and recovery planning as a strategy to respond to the pandemic and better prepare for the next crisis, keep following the COVID-19 Business Information Hub this month!


What we learned this month about how to promote recovery in Uganda’s agribusiness sector

In July, the COVID-19 Business Info Hub focused its efforts on understanding recovery mechanisms and opportunities for the agribusiness sector. We engaged with many stakeholders, including SMEs, financing institutions, and organizations offering support to the industry. Here is what we learnt!

 

The agribusiness sector has faced a number of challenges. 

Just as SMEs were recovering from the first wave of the COVID-19 pandemic, the second wave hit the country in May 2021. This led to another lockdown during June and July, which has brought more difficulties for SMEs operating in this environment. Some of the challenges faced by the businesses include:

  • Supply chain disruptions especially delayed transportation both by road and air cargo for agricultural inputs and products because of movement restrictions.
  • Working capital constraints because of reduced sales and delayed payments, which affect operational efficiency.
  • Reduced demand and price for agricultural products because buyers cannot easily access markets due to the lockdown.
  • Increased cost in retaining essential human resources as businesses work to keep staff on the payroll despite reduced operations to avoid losing critical talent to competition.

As a result of these challenges, SMEs have used up their cash reserves and thus need financial and non-financial support to recover.

 

Several organizations are providing support to help agribusinesses recover. 

Different sector players that we spoke to shared interventions they have in place to support businesses to stay afloat during the pandemic. Some are included here below:

aXiom Zorn creates digital profiles for farmers and agribusinesses to enable them to access financial services. The digital profiles capture data that builds a credit score for the farmer or the business. A credit score of 60% allows the farmer or agribusiness to access financing from a bank.

Stanbic Bank Uganda provides affordable loans to Savings Credit and Cooperative Societies (SACCOs) and farmer groups. SACCOs and farmer groups receiving these funds can then offer affordable loans to their members. Learn more about other interventions of the bank to reduce the financing gap in the financial sector.

Agricultural Business Initiative (aBi) promotes access to agricultural inputs by availing subsidized inputs to farmers to plant within the season. aBi Finance has also tweaked its credit guarantee product for partner financial institutions to help them to lend to customers with better terms.

Palladium is implementing a program to link farmers to service providers and markets via commercial agents. Through the model, over 80 businesses have benefitted to date with increased income.

 

Agribusinesses can implement a three-step plan to speed up the road to recovery. 

SMEs need to seek information to understand the shifts in the consumption, production and trade within the sector to plan for recovery and build resilience. Here is a three-step recovery pathway that SMEs can adopt;

  • Reflect: Pause and think about the impact COVID-19 has had on the business. Analyze what has worked during the period, lessons learnt and what needs to change. Then, adopt a holistic work approach to consolidate the best practices and manage change while maintaining a safe work environment.
  • Restart: Identify steps required to “restart” – maybe a new business process, a new product, or service line to fit in the new normal. Mobilize the necessary resources and take action.
  • Revitalize: Revisit the business environment to seize available opportunities along the value chain. SMEs need to optimize opportunities within the supply chain. They can improve volume flexibility, enhance delivery performance and identify areas where technology can help streamline processes to minimize costs.

 

For faster sector recovery, stakeholders also need to actively engage with the businesses to help them innovate and expand into new markets more than ever before.

 

SMEs can access information on:

Agribusiness financing from Stanbic Bank Uganda  

Call: 0800250250

WhatsApp: 0770588623

Visit:  www.stanbic.co.ug

 

Innovative digital solutions from aXiom Zorn 

Tel: +256 200 951 713/+256 200 903 099

Email: info@axiomzorn.com

Visit:  https://axiomzorn.com/

 

Commercial Agent Model from Palladium

Tel:   +256 774 040751

Email: jackline.kitongo@thepalladiumgroup.com

Visit: https://thepalladiumgroup.com/


Stanbic Bank Uganda is helping to reduce the financing gap in the agribusiness sector.

Melisa Nyakwera, Head Agribusiness at Stanbic Bank Uganda, spoke with the COVID-19 Business Info Hub on the banks’ initiatives to reduce the financing gaps for smallholder farmers and agribusinesses. 

Stanbic Bank Uganda’s initiatives to reduce the financing gap in the agribusiness sector

Stanbic Bank Uganda has the following initiatives to facilitate access to finance for the sector:

  • The bank uses the One Farm platform to profile farmers and agribusinesses. We understand their needs and provide solutions such as input financing, agronomy training, insurance, and information on markets.
  • Stanbic Bank Uganda is increasing access to affordable finance to the farmers through their SACCOs and farmer groups by lending to the SACCOs and farmer groups at a subsidized interest rate.
  • The bank provides several financial products to the sector, including short-term and long-term loans, invoice discounting, stock financing, and asset financing.
  • Using the Flexi pay wallet, clients receive and pay for services or commodities from one wallet to another at no charge.

Keep in mind that agribusinesses need to have in place good business records, plans and a clear strategy to access financing during these challenging times.

For more information call: 0800250250 or WhatsApp: 0770588623

What is the role of Stanbic Bank Uganda in the agribusiness sector?

Stanbic Bank Uganda’s agribusiness segment works with all customers within the agriculture space. We look at the value chain from input suppliers, smallholder farmers, aggregators, and processors. We also engage with non-government organizations (NGOs), development institutions and ministry agencies working together to make a difference. Our role is running through that whole value chain to understand the needs of different actors and develop solutions to meet the requirements. We ensure that the solutions help them achieve their needs, and in case they require long term support, we work and walk with them along that journey.

 

How is the bank facilitating access to finance for the agribusiness sector? 

The bank has several initiatives in place to facilitate access to finance for the agribusiness sector.

First, we’ve got a new initiative called the One Farm platform. Here, we partner with Agri-techs, who collect data from farmers and agribusinesses, analyze it to understand their requirements and provide solutions through the platform. Some of the services offered include input financing, agronomy training, insurance and information on markets. This initiative has helped to improve financial inclusion for several actors in the agribusiness value chain.

The bank has come together with several funding partners to provide affordable loans to Savings Credit and Cooperative Societies (SACCOs) and farmer groups.  SACCOs receiving these funds can offer affordable loans to their members as well. We are also helping the SACCOs and farmer groups digitize records for a faster lending process.  Funding partners include Agricultural Business Initiative (aBi), International Fund for Agricultural Development (IFAD) and United Nations Conference on Trade and Development (UNCTAD).

The third initiative is through the bank’s conventional offerings, which cut across the different value chain players from actual farmers, input providers to processors. Essentially, we have short-term and long-term loans, invoice discounting, stock financing, and versatile asset financing. We also have the Flexi pay wallet that enables users to receive and pay for services and commodities from one electronic wallet to another at no charge.

 

What can SMEs do to overcome disruptions resulting from the pandemic effects?

We all understand the impact of the pandemic, and we need to protect ourselves and keep safe. It means we have to go into the digital marketplace. Embracing digital tools will keep you safe and enable you to reach more customers than opting for face to face interactions.

Suppose businesses want to last and withstand the pandemic effects. In this case, they need good business plans, financial records and a strategy to follow through during this period. It will ease access to financing that they can use for operations to adapt to the current and future changes.

Financial institutions also need to play more in this space by supporting SMEs prepare the necessary records and plans to access the financing required.

 

For more information and access to Stanbic Bank’s Agri-banking Team;

Call: 0800250250

WhatsApp: 0770588623

Website: www.stanbic.co.ug

Visit any of our over 60 branches countrywide!

 

 


Learn how Commercial Agents in Uganda link agro-input SMEs to smallholder farmers and help both increase their incomes.

Northern Uganda – Transforming the Economy through Climate Smart Agriculture Market Development (NU-TEC MD) is a seven-year Foreign, Commonwealth & Development Office (FCDO) funded program to increase the incomes and climate resilience of poor men and women in northern Uganda. The program stimulates sustainable, pro-poor growth selected agricultural markets to improve the position of poor men and women within these market systems and make them inclusive for poor people.

Palladium, a global provider of positive impact solutions to the private sector, governments, and donors, implements the program on behalf of FCDO. The Commercial Agent Model (CAM) is one of the approaches that the NU-TEC MD program promotes as a win-win platform for the agriculture market actors.  The COVID-19 Information Hub details how the implementation of CAM has allowed small and medium enterprises (SMEs) to grow their businesses and increase farmers’ household incomes amidst disruptions of the pandemic.

The Commercial Agent Model (CAM) is an adjusted trader style designed to benefit farmers and off-takers. The model uses commercial agents to provide embedded services to farmers and aggregate produce for agri-businesses. The cost-effective model helps reach many smallholder farmers, including women and persons with disabilities. SMEs using the model incur less costs to source raw materials/produce. They have also registered a 75 per cent increase in sales due to the rise in volumes traded and higher quality raw materials sourced through agents.

Despite the benefits of the model, the pandemic has brought a lot of disruptions for businesses, and here is what SMEs are doing to stay afloat;

  • Process optimization is very critical at this time. Businesses should have an in-depth look into their operations, identify waste, eliminate them, and maximize resources like raw materials and staff time.
  • Seek information on how to adjust pricing because demand has gone down. It is now a very risky point because most companies react to reduce prices without considering the costs and margins.
  • Embrace opportunities for diversification in their business models. For example, if sourcing grain for the export market is a challenge, a business can add local food distribution.
  • Look out for new products or services lines. It means that if one business line is affected at least, the other keeps a business operating.
  • Mindset change on approaches such as mergers, partnerships and joint ventures. It is tough to remain afloat unless you’re able to network and collaborate with other businesses.

The program is discussing with; The Grain Council of Uganda (TGCU), Uganda Manufacturers Association (UMA) and Uganda Small Scale Industries Association (USSIA) to encourage their members to adopt the CAM model and pivot their businesses and remain in operation.

If you need guidance on adopting the model, contact us on Tel:  +256774040751 or jackline.kitongo@thepalladiumgroup.com.

What is the Commercial Agent Model (CAM)?

The Commercial Agent Model (CAM) is an adjusted trader style designed to benefit farmers and off-takers. The model uses commercial agents as points of sale for farmers. These agents link farmers to service providers for (inputs, mechanization, spraying, training, extension, offtake) and aggregate farmers’ produce. Agents ensure that the broader portfolio of embedded services to farmers is premised on a commercial approach and builds trusted relationships among the different actors. Most large and medium agribusinesses use the model to channel their products and services to smallholder farmers and distribute their finished products in the market. Over 80 businesses have benefited from this cost-effective model to deliver affordable and quality products and services to the most remote farmer.

 

How is the model facilitating growth among agribusinesses?

The CAM is the last mile model reaching many smallholder farmers, including women and persons with disabilities. Initially, the cost for outreach, especially to women and persons with disabilities, was high. By designing innovative mechanisms, we have enabled businesses to invest and easily reach out and recruit female agents. Below are the ways that SMEs realize business growth by using the model;

  • Using female agents has enabled SMEs to reduce losses because female agents source better quality grain and provide the required volumes as per the advanced funds.
  • Companies have also noted reduced sourcing costs as commercial agents do the grain traceability, storage, and transportation.
  • Businesses see cost-effectiveness because agents earn no additional income from the company other than commission and profit margin on their services.
  • Companies see an increase in sales of over 75% due to the rise in volumes traded and higher quality raw materials sourced.

The model encourages partnerships along the value chain; thus, actors can leverage each other’s advantage. Businesses need clear growth ambitions and expected benefits, analyze possible risks and find ways to mitigate them to build successful partnerships. Companies can access information on partnerships through training, mentorship and coaching. It will enable them to understand how to collaborate, create value and propel businesses.

 

What should SMEs do to stay afloat during this challenging business environment? 

Since 2020, we have been encouraging businesses to develop business continuity plans. We help them assess if they achieve the planned objectives and guide them on attracting external funding to implement the strategies. To stay afloat, here is what businesses need to do:

  • Process optimization is very critical at this time. Businesses should have an in-depth look into their operations, identify waste, eliminate them, and maximize resources like raw materials and staff time.
  • Seek information on how to adjust pricing because demand has gone down. It is a very risky point because most companies react to reduce prices without considering the costs and margins.
  • Embrace opportunities for diversification in their business models. For example, if sourcing grain for the export market is a challenge, a business can add local food distribution.
  • Look out for new products or services lines. It means that if one business line is affected at least, the other keeps a business operating.
  • Mindset change on approaches such as mergers, partnerships and joint ventures. It is tough to remain afloat unless you’re able to network and collaborate with other businesses.

 

How can SMEs integrate the model the business operations?

Agribusinesses working with smallholder farmers and would like to integrate the model in their operations can contact us for assistance on;

Tel:   +256 774 040751

Email: jackline.kitongo@thepalladiumgroup.com

Visit: https://thepalladiumgroup.com/