Connectivity A Secret Sauce For Growing SMEs

Information Technology (IT) experts have said that internet connectivity and digital payments are drivers of good performance for Small and Medium Enterprises (SMEs) in Uganda. “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,” said Allan Ssemakula, the Director Enterprise at Airtel Uganda said during an online thought- leadership forum hosted by Airtel Uganda

“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 per cent 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 translated 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,” Ssemakula added.

SMEs account for approximately 90 per cent of the entire private sector, generating over 80 per cent of manufacturing output that contributes 20 per cent of Uganda’s gross domestic product (GDP) according to Uganda Investment Authority. “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,” said Tony Otoa, the Chief Executive for Stanbic Business Incubator.

“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.” Otoa mentioned the Google location and Google business as important tools that give direction in ensuring transformation, adding that telecom companies will play a big role in this development.

According to John Kakungulu Walugembe, the Executive Director for the Federation of Small and Medium Enterprises-Uganda whereas the Covid-19 pandemic hit hard the sector, there has been a quick transition of business in urban areas than it has been in the rural setup.

“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,” Walugembe said. He noted there is need to provide devices at an affordable cost to ease accessibility.