UAP Old Mutual has in collaboration with the Federation of Small and Medium Enterprises (FSME), tipped SMEs in financial literacy and insurance.
The event brought together over 400 Small and Medium Enterprises (SMEs) to explore strategies for financial resilience, with a focus on effective financial management.
The engagement aimed at equipping Uganda’s SMEs with essential tools to strengthen their businesses, achieve financial stability, and promote growth.
Speaking during the session, Carolyn Tayebwa, the head of marketing and distribution at UAP Old Mutual Insurance said the training meant to address these gaps, equipping business leaders with critical knowledge and resources to better protect and sustain their enterprises.
She also underscored the essential role of insurance as a backbone for SME stability.
“Insurance acts as a vital safety net, offering financial relief in unforeseen circumstances that could otherwise devastate a business. Through embracing diverse insurance products, businesses can recover faster and build a secure foundation for long-term success. Our goal is to help SMEs recognize insurance not as a cost, but as a strategic investment in their future,”Tayebwa said.
Despite their significant contribution to the economy, with 1.1 million SMEs accounting for 80% of Uganda’s GDP, SMEs often struggle to sustain their businesses long-term.
Figures from the Uganda Investment Authority (UIA) indicate that only 30% of businesses have operated beyond three years, with limited financial literacy cited as a key challenge.
Insurance Regulatory Authority (IRA) data further indicates that while awareness of insurance among SMEs is rising, it remains low, with only a fraction of SMEs insured for more than five years.
A 2021 survey indicated that out of 514 respondents, 96% of the SMEs lacked insurance coverage.
Apollo Mbowa Kibirango, Financial Literacy Manager at NSSF Uganda said financial literacy is crucial for SMEs in achieving financial wellness.
“Financial literacy empowers SMEs to make proactive, informed choices that secure not only their businesses but also their families. Building a solid understanding of financial tools, including insurance, ensures that these businesses can have a prosperous future.”
John Walugembe, Executive Director of FSME, expressed FSME’s commitment to addressing the financial literacy gap among SMEs, an area crucial to their survival and expansion.
“SMEs greatly contribute to our economy, yet they face significant risks that can threaten their existence. Through financial literacy and partnerships like this with UAP Old Mutual, we equip the businesses with the knowledge to make informed financial decisions,” Walugembe affirmed.
Officials said UAP Old Mutual’s collaboration with FSME reflects its commitment to nurturing financial wellness among Uganda’s SMEs.
