How is the START facility solving issues of the bank’s willingness to lend to SMEs and the high costs of financing?
START’s Technical Assistance for selected projects help reduce the risks associated with these projects so that the cost of financing is low. START charges loan interest of 10% to 12% and one-off processing fees of not more than 1%.
What is the minimum/maximum grant or loan that START facility can provide?
START facility targets projects that need additional funding from approximately UGX 40 million to UGX 400million. The project developer’s equity contribution should be at least 25% of the total project cost.
If one cannot afford the 25% of the project owners contribution should they not apply?
Every applicant must demonstrate their commitment for the project. The 25% contribution can either be cash contribution or in-kind in form of assets. The project developers will have to produce evidence of ownership of such assets to be accepted as part of the contribution.
Do land agreements qualify as collateral for the loans?
Land agreements are not sufficient evidence; you will need Certificate of Customary Ownership that are in the individual/company/cooperative/association names.
How frequently are START facility calls for proposal published?
START facility will hold one call for proposal per year for the 4 years of the Facility. You can find all information on the START call for proposals on the websites of PSFU; www.psfuganda.org.ug and UNCDF; www.uncdf.org which are regularly updated. The call for proposals will also be published in the national newspapers.
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