The National Social Security Fund (NSSF) has unveiled a program under which it will acquire a shareholding in small and starting enterprises, as a way of enabling them to acquire “patient capital”. In partnership with Mastercard Foundation, the Fund has earmarked more than Shillings 7.6 billion as seed funding for 100 indigenous women-owned businesses under its NSSF Hi-innovator program.
The NSSF Hi-Innovator is a program that is aimed at supporting early-stage, small and growing enterprises mainly owned by women and youth over a five-year period. NSSF used the ongoing Uganda Innovation Week to announce its 3rd funding round under the program dubbed; NSSF Hi-Innovator Women Accelerator.
Patrick Ayota, the NSSF Deputy Managing Director said that the funding is aimed at giving women entrepreneurs an opportunity to improve their business skills and grow their businesses whilst readying them for future investor funding. He encouraged Uganda’s business people to adopt partnerships in business because then, the risks are spread and this makes the enterprise stronger.
The program aims to empower 132,000 youths across the country through 120 innovation hubs, and targets 92,000 women, employers, and employees. Studies show that Uganda is the second country in the world with the highest percentage of women-owned enterprises. However, these are mainly small and low profit-making compared to those owned by men.
Ayota says the NSSF initiative is out to change this. According to him, the main reason why Ugandan enterprises collapse as soon as they are started is that Ugandans have no patience and want immediate profit.
The NSSF job-creation program is also expected to serve as a sustainability project for the savings scheme. Ayota says if the current trend of fee jobs being created continues for at least 16 years, the retirement savings industry could collapse.
“Whereas Uganda is ranked the second country in the world with the highest number of women business owners (38.4%), according to a 2021 Mastercard Index of Women Entrepreneurs, a 2019 World Bank report stated that women-owned micro enterprises in Uganda generate 30% lower profits than their male counterparts,” he said.
The Fund will provide 75 million Shillings as seed funding for each woman-owned business and this funding round targets at least 100 businesses. NSSF will then have the option of converting their financial contribution into equity or shareholding of an initial 6 percent, which will enable them to maintain close contact and monitor their investment.
The NSSF Hi-Innovator Women Accelerator is open to all women entrepreneurs in all economic sectors across the country until the end of January 2023. Adrian Mulindwa Bukenya, the Mastercard Foundation Country Head said their intervention is part of the foundation’s vision of accessing people to more dignified jobs.
“Our vision is to play a catalytic role in supporting partners to spur change built on a shared vision and values, equity, and accountability. Our approach is holistic, emphasizing resilience and coordination among local implementing partners,” he said.
This is the reason they joined the Hi-Innovator Women Accelerator, to support ‘highly impactful and scalable small and growing businesses” to access seed capital and technical support for their businesses.
In addition to the seed funding, the selected businesses will have unlimited access to customized business courses on the Hi-innovator Business Academy – an online learning platform, with tailored technical support, mentorship, and peer-to-peer learning opportunities.
Applicants will first receive entrepreneurial skill training through the Hi-innovator business academy, then pitch to an expert panel of judges. It is through pitching that successful businesses will be selected. To join, interested female entrepreneurs will apply via https://hi-innovatorbusinessacademy.nssfug.org/.
Explaining the criteria, Richard Zulu, the Outbox Team Lead, said that participating businesses must have at least half female ownership or 70 percent or more women in top management, and must be legally operating in Uganda for at least two years, among others. On the strict criteria, Zulu explained that it is aimed at the strength of the company and the vision of the entrepreneurs before they are taken on.
Until now, NSSF has been known for investing in government treasuries, large real estate projects, and companies listed on the stock markets in East Africa.