Dr Joyce Tamale with other capital Solutions officials and associates pause for photos after a recent graduation of young entrepreneurs at their Egret Hub in Kajjansi on the outskirts of Kampala
HABARI DAILY I Kampala, Uganda I A new avenue for young Ugandan entrepreneurs to access seed capital and turn promising ideas into viable businesses has been established through Capital Solution’s Social Investment Fund, which is approaching capitalisation of up to Sh500 million, officials have revealed.
The initiative is aimed particularly at young entrepreneurs and women whose potential to drive economic growth, innovation and community resilience remains largely untapped because of limited access to affordable financing.
Despite their growing contribution to Uganda’s grassroots economy, many young women entrepreneurs remain concentrated in informal trade and struggle to transition into higher-value enterprises. The challenge is often not a lack of ideas or determination, but access to the capital required to transform those ideas into sustainable businesses.
It is this gap that Capital Solutions, an entrepreneurship development company, says it is seeking to address through the Social Investment Fund.
Dr Joyce Tamale, the Managing Director and co-founder of Capital Solutions Ltd, said the fund was established to provide young entrepreneurs with affordable financing at the critical stage when their businesses are still developing.
“The fund was created to address one of the biggest challenges facing young entrepreneurs—access to affordable capital at the point when their businesses are still developing,” Tamale said.
The Social Investment Fund, which was started in 2021, targets early-stage social enterprises requiring relatively small amounts of money to establish or expand their operations.
Unlike conventional commercial financing, the fund provides debt capital at very low interest rates and does not require borrowers to provide conventional collateral.
Tamale said the fund currently provides between Sh5 million and Sh20 million in debt capital to individual beneficiaries, with its overall capital base continuing to grow towards Sh500 million.
“The Social Investment Fund runs debt capital is between Sh5m to Sh20m,” she said.
The model is designed to ensure that entrepreneurs who may be considered too small or too risky by conventional financial institutions can obtain the resources needed to launch their businesses.
Capital Solutions has also incorporated grants into the model, particularly where resources are provided through development and investment partners.
This combination of affordable loans and grants gives young entrepreneurs multiple opportunities to obtain seed capital, while ensuring that the fund itself can continue revolving and supporting successive generations of businesses.
Tamale said the fund is part of a broader strategy through which Capital Solutions links entrepreneurship training to actual opportunities for participants to obtain capital.
“In all the programs Capital Solutions has designed in the last three years, we ensure there is a small component of an innovative fund, such that when the young women are graduating, if a program is six months or it’s one year, there is a competition where we pass on real cash capital to the young people,” she said.
The approach means that training does not end with certificates and business plans. Participants are given an opportunity to compete for financing and demonstrate that their enterprises are ready for investment.
Capital Solutions prepares participants for this process through investment-readiness training.
“We prepare the young women for investment readiness on the last day when we are passing them out. At the tail end of each training, we usually invite experienced investors to look at the business preparations of our young entrepreneurs and possibly provide them with some funding,” Tamale said.
The strategy has already begun producing results, with more than a quarter of graduates reportedly receiving referrals to potential investors.
“We have seen over 25% of the graduates get referrals. These impact investors reach out to us and say, can I talk to so-and-so?” Tamale said.
Some entrepreneurs have subsequently secured seed financing ranging from Sh5 million to Sh10 million, while others have attracted investments of up to $10,000 to establish or expand their enterprises.
Access to the Social Investment Fund, however, is tied to membership in the Social Entrepreneurship Association, a requirement Capital Solutions says helps create accountability because borrowers are not required to provide conventional collateral.
“For you to access the fund, first of all, you need to join the Social Entrepreneurship Association. Reason being that, because we don’t ask for collateral, we must know you,” Tamale said.
The arrangement is intended to build a relationship between the entrepreneurs and the institution while providing an alternative to the collateral-based lending practices that often exclude young people and first-time business owners.
For Uganda, the fund could provide an important bridge between entrepreneurship training and actual enterprise development. Many young people graduate with business ideas but struggle to secure the initial capital required for equipment, stock, technology, marketing or working capital.
Capital Solutions’ model seeks to close that gap by combining training, investment readiness, mentorship, grants and affordable credit.
As the Social Investment Fund approaches the Sh500 million mark, its revolving structure could enable more young Ugandans to access seed capital and create enterprises capable of generating jobs and incomes.
Tamale said the low-interest model is deliberately designed to remain sustainable, allowing capital to be recycled and extended to other entrepreneurs rather than benefiting only one cohort.
The initiative therefore represents more than a financing programme. It is an attempt to create a pipeline in which young Ugandans are equipped with business skills, prepared for investment and then given access to the capital necessary to transform their ideas into functioning enterprises.
For a country whose rapidly growing youth population requires more opportunities to participate meaningfully in the economy, such interventions could help shift young entrepreneurs from informal survival activities into productive, scalable businesses.
