WE SHOULD ENCOURAGE MORE BUSINESSES TO FORMALISE

 A recent media article showed that over 10,000 businesses were to be deregistered. The Uganda National Business Development Strategy showed that over 90% of Uganda's economy is dominated by informal sector. However it highlights the fact that a number of them face challenges such as lack of access to capital and weak business management skills. This is detrimental to the economy because most of these businesses do not survive beyond their second birthday. This means that this affects the job creation rate and loss of revenue to government.

It is important to promote formalization of businesses because it enables them to attract funding from different development partners and private institutions such as Banks. Due to a high level of informality, a number of them opt for high cost sources of capital. This means that they find it hard to break even and in the end they collapse. 

A number of start ups have attributed their development and evolution to Business Development Support. A number of enterprises were unknown entities but when they opened up to formalization they attracted more customers and even got tenders from government. With the emergency of the oil industry more small businesses should get ready for the enormous opportunities through formalization. Having been at the forefront of providing financial literacy training for the last 5 years I have realized that Ugandans are very hard working people. However a number of them take their side hustles for granted. Due to such a mindset the side businesses stagnate yet they have the potential to grow into global companies. We should be inspired by stories such as Equity Bank which started as a small building society and today it is a financial conglomerate serving in 6 countries.

BENEFITS OF FORMALISATION

1.It enables the business to attract funding

2.It ensures sustainability because Uganda Revenue Authority may not close such a business

3.Credibility from customers

4. Enhances growth and contribution to the economy

For individual and corporate financial literacy training contact :


Phillip Kiryowa

Personal Finance Coach 

Advanced Empowerment Link 

+256752615916

For Financial Freedom and Sustainable Enterprises

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