Small and Medium Enterprises (SMEs) in Uganda have been advised to keep a cash buffer to tackle unexpected challenges, according to Grace Semakula, chief executive of SBG Securities.
Speaking at the October Masterclass hosted by Stanbic Business Incubator Limited (SBIL), themed: “Benefits of Investing in Unit Trusts for SMEs and Individual Investors,” Semakula shared strategies for business resilience and growth.
“Cash should be viewed as a strategic tool for growth, not left idle money loses value,” Semakula emphasised. He referenced the COVID-19 lockdown, illustrating how liquidity during crises enables businesses to survive and even prosper by adapting their models and market positioning.
Drawing on the 2008 global financial crisis, Semakula cited Apple’s success, noting its $25 billion cash reserve and lack of long-term debt.
“Apple’s disciplined cash flow management and focus on profitability gave it a competitive advantage, avoiding external financing and seizing opportunities others couldn’t,” he said.
Semakula stressed the importance of minimising debt reliance and building financial resilience. “Internal cash is the most cost-effective and flexible form of finance. Build reserves during prosperous times to navigate downturns,” he advised.
On diversification, Semakula pointed to the Stanbic Unit Trust, launched in June last year, as a way for SMEs to manage risk while pursuing growth. “Entrepreneurs face significant risks, but diversification can mitigate these and foster expansion,” he noted.
Catherine Poran, Chief Executive of SBIL, echoed this sentiment, expressing confidence that SMEs adopting diversification will strengthen their businesses.
“Diversification is crucial for resilience,” she said.
SBG Securities and SBIL, both subsidiaries of Stanbic Uganda Holdings Limited (SUHL), focus on brokerage, investment advisory, and capacity-building for SMEs. SBIL provides operational training, market access, and financial support to help businesses thrive.
