The name of the Grand Global Hotel suggests no want of ambition. But the project ran into financial problems before building work had even finished, says its owner, Emmanuel Tugume. His bank raised interest rates, and would not make allowances for delays in construction. Mr Tugume eventually got a loan from GroFin, a specialist business lender, and now his hotel is thriving. But his experience with Uganda’s banks still rankles. “They do not adjust to people like us,” he says. “They look after the big-time clients.”
Small and medium-sized enterprises (SMEs) all over the world grumble about access to finance, but the problem is worse in developing regions. Around two-thirds of SMEs in poor countries cannot borrow as much as they would like, compared with a sixth in the rich world, says the International Finance Corporation, the corporate-lending arm of the World Bank. It put the “credit gap” for small but formal businesses in developing countries at around $1 trillion in 2011. Throw in informal firms, and the shortfall is even greater.
