BANK OF UGANDA
Remarks by
Louis Kasekende (PhD.)
Deputy Governor, Bank of Uganda
At the Graduation Ceremony of the pioneer class of the "Orient
Bank's Financial Literacy Programme"
Sheraton Hotel Kampala; April 20, 2017
The Principal Makerere University Business School (MUBS)
The Board of Directors and Senior Management of Orient Bank Ltd.
Members of the Private sector and our graduates,
Distinguished Guests,
Ladies and Gentlemen,
It is a great honour to preside over the first graduation Ceremony of
the "Orient Business Academy". Before I begin, let me convey the
apologies of the Governor, Prof Emmanuel Tumusiime-Mutebile, who
is currently in Washington representing Uganda at the spring
meetings of the IMF and World Bank.
This academy, which I was privileged to launch in August 2016, is an
initiative of Orient Bank and MUBS. The main objective of the
academy is to equip Micro and Small Enterprises with financial
resource management skills and knowledge. As such it complements
the financial inclusion agenda of the Bank of Uganda. I wish to
congratulate all the graduates of the Orient Bank financial literacy
programme for having successfully completed their training
Our economy is dominated by the micro and small scale business
sector, which (including smallholder farming) provides employment
for more than 90 percent of the labour force. However, micro and
small enterprises face major barriers to growth. The vast majority of
these enterprises remain very small and most struggle to survive let
alone expand.
A lack of essential business skills on the part of entrepreneurs is one
of the impediments to the growth of micro and small scale businesses.
A critical requirement for the success of a micro or small enterprise is
that it should be able to generate positive cash flows at all times, but
this is often poorly understood by entrepreneurs.
The paucity of business skills extends to the proper use of finance. If
an entrepreneur is to contract a loan to finance his or her business, it
is essential that the entrepreneur understands clearly how the
finance will be used to add value to the business, so that he or she
will be able to service the loan in full and also increase the profits of
the business. If this is not the case, the loan simply becomes a
burden on the business and may contribute to its collapse.
As such, basic financial literacy is essential if entrepreneurs are to be
able to use finance constructively. They must be able to work out how
much profit they earn from their businesses, and estimate how much
additional profit, if any, they will earn if they take out a business loan
and then fully service that loan. Entrepreneurs must also have a good
grasp of the risks that they run. Business revenues are often volatile,
yet loans must still be serviced even when revenues are lower than
expected. Will an entrepreneur still be able to service his or her loan if
the business suffers a fall in revenues? These are the types of
questions which entrepreneurs must be able to answer before they
apply for a loan.
I urge the graduates of this pioneer class of the academy to apply the
skills acquired during the programme in their businesses and
personal lives as well as share the knowledge acquired with the wider
business community to bolster entrepreneurship.
To conclude I wish to take this opportunity to congratulate Orient
Bank, the Management of Makerere University Business School and
the graduates upon successfully completing the training programme.
I thank you.
Louis Kasekende (PhD.)
DEPUTY GOVERNOR