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Ugandan Companies’ Fear Due Diligence Checks – NSSF :: Uganda Radionetwork
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Ugandan Companies’ Fear Due Diligence Checks – NSSF

NSSF is a Shs 10.2trillion fund and there have been suggestions that it could use part of that money to support innovative Ugandan companies. This would mean that when the companies have broken even, the fund can recover its investment
NSSF Mbarara building. The Fund wants to invest in Ugandan businesses but many fear due deligence checks

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National Social Security Fund (NSSF) has tried to invest money in medium sized Ugandan companies but their owners rejected attempts to investigate their status, according to the Fund’s deputy managing director Patrick Ayota.

Ayota, who was on Thursday speaking at the Economic Mukutano 2019 at Sheraton Kampala, said NSSF found difficulties to do due diligence in order to put money in the companies. Their owners, he said, thought the Fund was being too intrusive.  

//Cue in: “The midsized companies…”

Cue out: “…of a billion shillings.”//

NSSF is a Shs 10.2trillion fund and there have been suggestions that it could use part of that money to support innovative Ugandan companies. This would mean that when the companies have broken even, the fund can recover its investment.

Ayota said they attempted last year to invest in four companies but found many had challenges with governance. Some owners, he said, were comfortable owning 100% of a one million shillings’ company than ceding some shares to generate money to grow the company.    

Currently, NSSF puts much of the money in fixed accounts in banks and invests in government bills and bonds. This does not help grow the economy. 

Barbara Mulwana, executive director of Uganda Manufacturer’s Association (UMA), said smaller producers had challenges including finance which hinders their ability to innovate. 

She said those that attempt to innovate take long to recover their money, with some folding along the way.

//Cue in: “There is a challenge…”

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Access to long term finance from entities like NSSF would come handy to help some of these small companies to innovate. On his part, Professor Umar Kakumba, the deputy VC Makerere University, said they are positioning the university to do research that can be used by companies and individuals to grow their ventures.

//Cue in: “that research…”

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Government has extended Shs 30bn to the university for research. There is hope that the research can be tapped by the entities that may need to use it, especially businesses.

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