Uganda is booming with over 70 Fintech Companies and these are the top most
Needless to say, there are as many expectations as they are members of the Club; expectations formed within the context of individual members’ experiences, biases and knowledge. These expectations do not always align with the reality of what goes on within an Investment Club.
The first expectation people tend to have about Investment Clubs is that because members have a common goal, there will always be consensus. Most Investment clubs are formed within existing networks of friends, family or work colleagues, and it is easy to assume that everyone will have the same mind about issues along the way.
However, when people’s livelihood is at stake, tensions tend to rise high. If no guidelines exist to govern the process of agenda-setting and decision making, the group will very likely come apart before anything of note can be achieved. Therefore it becomes a top priority for any Investment Club to develop an operating agreement right at the formative stages.
The club members need a constitution to streamline the governing structure. It will make it so much easier to navigate conflict along the way. Right from the beginning, the Club must be intentional about establishing each individual’s aims and objectives. Everyone’s expectations should be realistic and must be compatible.
The agreement must address questions like:
The Ugandan government wishes to transform Uganda into an upper-middle-income country by 2040. The surest way this goal can be attained is if we address the problem of unemployment, by increasing the capacity for self-employment. Ugandans and their proclivity for entrepreneurship has been well documented earning the top spot as the most entrepreneurial country in the world twice; the first time was in 2003 and then more recently in 2015.
However, we cannot celebrate just yet because over 41.1% of MSMEs in the country fail within the first two years. Moreover, it has been reported that for every three Ugandans that get out of poverty two fall back in.
It is imperative that Ugandans position themselves and each other to succeed in business. And what better way, than to take advantage of the power of many in the Investment Club.
In 2016, the Uganda Investment Authority recognized Investment Clubs as the Alternative funding for MSMEs. This statement mirrors the growing trend that has resulted in an explosion of Investment Clubs in Uganda over the last decade.
As of 2019, the Investment Club Association of Uganda estimated that there were over 8,000 Investment Clubs in the country. A remarkable statistic which indicates that the Ugandan population is becoming increasingly aware of the vital role Investment Clubs play in our economic development.