Small and medium enterprises (SMEs) in Uganda drive over 70% of GDP and employ 80% of the workforce, with access to tailored financial services remaining a critical barrier to growth. Equity Bank Uganda has addressed this challenge with its SME-Focused Banking Services, a suite of innovative products including loans, trade finance, and asset finance, designed to empower SMEs.
By leveraging digital platforms like the Equity Mobile app and *247# USSD code, Equity Bank is transforming how small businesses access capital and manage finances, fostering entrepreneurship and economic development across the country.
The SME Financing Gap
SMEs in Uganda, ranging from retail shops to agribusinesses, face significant hurdles, including high collateral requirements, lengthy loan approval processes, and limited access to trade and asset financing.
According to the Uganda Bureau of Statistics, only 15% of SMEs access formal credit, stifling their ability to scale or compete. Equity Bank’s SME-Focused Banking Services tackle these challenges by offering customized financial solutions with streamlined, technology-driven processes.
This initiative aligns with the bank’s mission of financial inclusion, as seen in programs like the Young Africa Works Strategy with the Mastercard Foundation, which supports economic empowerment for underserved groups.
By integrating digital tools, Equity Bank ensures SMEs in both urban and rural areas can access financing and manage transactions efficiently, driving business growth and job creation.
How SME-Focused Banking Services Work
Equity Bank’s SME-Focused Banking Services encompass a range of products tailored to small and medium enterprises:
- SME Loans: Collateral-free or secured loans ranging from UGX 1 million to UGX 500 million, with flexible repayment terms (3–36 months) and competitive interest rates (1.5–2.5% monthly). These loans support working capital, inventory purchase, or business expansion.
- Trade Finance: Solutions like letters of credit and bank guarantees facilitate local and regional trade, enabling SMEs to secure contracts or import goods.
- Asset Finance: Loans for purchasing equipment, vehicles, or machinery, with repayment plans aligned with business cash flows.
SMEs apply for these products via the Equity platform, accessible through the mobile app or *247# USSD code, or at one of Equity’s 8,000 agency banking outlets (Equity Duuka). The application process is digital, requiring business details and transaction history, with approvals often completed within hours.
Digital credit scoring, based on account activity and cash flows, reduces reliance on collateral, making financing accessible to smaller enterprises. Funds are disbursed directly to accounts, and repayments can be made via mobile banking, POS machines, or agents.
Financial literacy training, delivered through SMS, virtual workshops, or in-person sessions, equips SMEs with skills in budgeting, record-keeping, and digital banking, ensuring sustainable financial management.
Technology Powering the Services
SME-Focused Banking Services are built on Equity Bank’s advanced digital infrastructure, leveraging cloud-based systems and secure APIs.
The bank’s platform enables seamless application processing and account management, with machine learning algorithms analyzing transaction data to assess creditworthiness and minimize default risks. End-to-end encryption protects sensitive business data, addressing cybersecurity concerns in Uganda’s digital economy.
The *247# USSD interface ensures inclusivity, allowing SMEs in rural areas with limited internet access—where smartphone penetration is below 30%—to apply for services using feature phones.
Integration with POS machines and agency banking outlets supports cashless transactions and cash deposits, creating a hybrid digital-physical ecosystem. This scalability allows Equity Bank to serve thousands of SMEs efficiently, reducing operational costs and enabling competitive pricing.
