Business

Digital connectivity, payments a major boost to SME performance in Uganda-say experts

Internet connectivity and digital payments are driving the performance of Small Medium Enterprises (SMEs) in Uganda. This was revealed at an online thought-leadership forum hosted by Airtel Uganda under the theme, E- commerce and digital connectivity opportunities for SMEs, on Friday, 16th April 2021.

Commenting on the role of digital connectivity opportunities for SMEs, Allan Semakula, Director Enterprise at Airtel Uganda said that, “The new normal has opened up the digital space and e-commerce to SMEs, due to lockdown and health standard operating procedures issued by the Government, thus facilitating more e-commerce transactions.”

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Semakula stressed that, “From an e- commerce perspective, before, we could talk of cheques and physical cash but now we are evolving to digital payments like Airtel Money which are safer from a health perspective. Time may come where the balance in terms of scale between cash and digital payments might shift to 90% digital payments.”

According to the 2020 fourth quarter Uganda Communications Commission Market Performance Report, mobile money transactions crossed the 1 billion transactions mark for the first time surpassing the previous quarterly record of 954 million transactions. This translates into an average of 15 transactions per active mobile money account every month.

“The commendable mobile money usage and the lucrative e-commerce space for SMEs, has continued to inform Airtel’s decision to invest in over 2,100 network sites across the country intended to bring the services closer to the customers with the desired internet connectivity, at an affordable cost as they transact,” noted Semakula.

SMEs account for approximately 90% of the entire private sector, generating over 80% of manufactured output that contributes 20% of Uganda’s gross domestic product (GDP) according to Uganda Investment Authority.

Tony Otoa, Chief Executive at Stanbic Business Incubator said that, “In the SMEs space, there is a lot of evolvement. At the incubator, we operated in a brick and mortar way where we had to train individuals in a classroom setting, but now, we have to embrace the digital platform.”

“Internet then was for social networking but now, it is for everything and for a business, we have seen how these channels support in engaging customers, how a business can; advertise, sell, or identify which platform can support their growth,” noted Otoa.

Otoa further explained that, “One of the modules we had never thought about is Google location, and Google business.  These are important because they give direction and as a lot is transforming, telecoms are going to play a huge role towards this development.”

Speaking at the same forum, John Kakungulu Walugembe, Executive Director, at the Federation of Small and Medium Enterprises-Uganda revealed that “After COVID-19, we are seeing a quick transition of businesses in urban areas, however, those in rural areas are still facing a challenge, which issue needs to be addressed. Adding that, “Digital literacy with simple training on how you use a phone, social media platforms among will support in this realization, particularly targeted for micro businesses in rural areas.”

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