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Kampala, Uganda | THE INDEPENDENT | A new partnership between SHONA Capital and Cornerstone Asset Managers is injecting $500,000 (USh1.84bn) into Uganda’s small and medium-sized enterprises, a move that underscores growing momentum to domesticate financing for the country’s backbone businesses.
The investment, sourced from high-net-worth individuals through Cornerstone’s Private Wealth Management division and backed by a guarantee from Kuo Sharper Initiative, is designed to offer much-needed capital to high-potential SMEs, particularly in agriculture and healthcare. It also aims to shield them from the volatility of foreign currency-denominated funding—an issue that has long plagued entrepreneurs in emerging markets.
SHONA Capital, which specialises in flexible debt financing, will deploy the capital alongside tailored business support from industry experts. The firm’s model focuses on offering not just money, but management insight—a critical gap for many small firms navigating early growth phases. Cornerstone, one of Uganda’s leading investment houses, brings to the table experience in wealth management, advisory services, and institutional investing.
The deal is a notable development in a country where SMEs contribute around 80% of GDP and employ the bulk of the workforce, yet consistently face daunting barriers to formal finance. According to a 2021 World Bank report, the financing gap for Ugandan SMEs stands at $4.7 billion (USh17.2 trillion). While local banks have gradually increased SME lending, many firms remain shut out due to lack of collateral, high interest rates, and limited credit history.
“By mobilising domestic capital, we are creating a sustainable funding model that allows entrepreneurs to scale, create jobs, and strengthen Uganda’s economy,” said Ivan Mandela, SHONA Capital’s chief executive. “This is not just about returns—it’s about building resilience in the economy, and aligning with national priorities like the ‘Buy Uganda Build Uganda’ policy.”
Simon Mwebaze, managing director of Cornerstone, echoed the importance of tapping local resources for local growth. “SMEs are the backbone of our economy, but access to financing continues to limit their potential,” he said. “Partnering with SHONA Capital enables us to channel capital where it can generate both financial and social dividends.”
Uganda’s private equity and venture capital industries remain underdeveloped relative to regional peers such as Kenya and Nigeria. Many domestic businesses still rely heavily on foreign capital—leaving them exposed to currency swings and policy risk in donor countries. The SHONA-Cornerstone partnership points to a growing shift toward locally anchored, long-term investment mechanisms.
The partners are already eyeing further expansions of the model, with plans to mobilise additional capital from pension funds, fund managers and affluent Ugandans.
