Small and Medium Firms in Uganda – A Junior Professional Consultants Journey.

Written by Qasim Khanani, JPC UNDP Uganda 

 I was part of the Development in Northern Uganda(DINU) initiative with United Nations Capital Development Fund(UNCDF) and part of my job was to take a field trip to northern Uganda in different districts for 3 weeks where I was supposed to conduct due diligence for 17 firms (small and medium) who had been shortlisted to receive funding under the START facility (a facility which offers blended finance depending on the requirement of the firms) with the primary focus on women and youth in the agro-processing industry. Little did I know I was in for a major culture shock and an enriching experience.

 The owner is walking me through the
process of extracting honey from
the raw honeycomb during a site visit.

I was working with an auditor and an investment officer who had mentored me well enough for me to be able to not only structure myself in an appropriate manner to the Ugandan context but to also lead in conducting due diligence at times. Due diligence started with getting to know the firm and its story and then proceeded into financial analysis. The reason for this was because many firms felt intimidated with the intrusive nature of the questions which was only heightened with a foreigner (referring to myself) on board to conduct due diligence. The slow and steady process allowed the firm to settle down and consider me and my colleagues as partners and open up to us, so that we may best help them. While the entrepreneurs may have shown signs of intimidation, I was truly inspired by their persistence and perseverance as northern Uganda had been through a civil war which lasted for approximately 26 years!

The findings were rather amusing and shocking. 100% of the firms showed a lack of technical understanding in numbers and value chain analysis. Some entrepreneurs decided to lie about the financial health of the company. One firm decided to show an audit statement with the stamp of April 2019 on it - 2 months in advance. Upon, seeing the condition of the firms, I decided to conduct a small research project simultaneously along with due diligence to understand the small and medium firms in Uganda. My recommendation of providing business development services to such firms was agreed upon with the senior economic advisor of Uganda who started to mobilize resources for it.

Finally, 5 firms were selected who would receive funding and the remaining 12 firms would be provided business development support which would ensure there are more firms selected when the START facility calls for proposal next year.

Overall It was an enriching experience and an inspiring one seeing how my work can affect many individuals, families and communities.

 A candid picture with the entrepreneurs of 2 firms (standing immediately beside me on my right and left) who struggled to expand their business due to war in northern Uganda. The 2 entrepreneurs also happen to be husband and wife and both of them have been selected to receive funding under the START facility to help grow their business.