Nano by Necessity: Unlocking Growth for Women Entrepreneurs in Uganda and Beyond

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Uganda’s 1.1 million nano and micro enterprises are the economy’s backbone, driving jobs and economic growth. Women lead 55% of them, sustaining households, strengthening communities, and powering local markets. Yet CGAP’s latest research shows too many remain “nano by necessity,” held back by scarce collateral and gaps in digital and financial literacy that limit scale and resilience. What will it take to change that?  

We speak with GnuGrid—Uganda’s first and only indigenous credit reference bureau—and the Ministry of Finance. How can policymakers, financial service providers, and development partners design tailored interventions that meet women where they are? And how can an ecosystem-wide response unlock the full economic potential of Uganda’s women entrepreneurs? 

This is Season 3, Episode 2 of CGAP's podcast, Inclusive Finance Frontiers. 

Featured Voices

• Sandra Nakabiri, Senior Economist at Uganda’s Ministry of Finance, Planning and Economic Development 
• Sumayyah N.S Mutagubya, Managing Director of GnuGrid  
• Gladys Kwalisima, corn vendor in Uganda
   

Listen and subscribe for free on your favorite platform. If you have any feedback, connect with us at podcast@cgap.org.

Transcript 

Sumayyah Sengendo: Exclusion is actually a form of risk. Because when these women are actually locked out of formal credit, borrowing does not stop. It simply shifts to informal channels, because they're not able to access credit from formal institutions. And informal channels previously were excluded from having visibility or even having consumer protection.

Lamis Daoud: Uganda’s 1.1 million nano and micro enterprises are often described as the backbone of the economy — and for good reason. These are the market vendors, the small shop owners, and the women selling produce by the roadside.  

Nano enterprises are typically run by a single person, often informally, with no paid employees. Micro enterprises are slightly larger — maybe a small shop with a few regular workers and steadier revenue. Together, they drive jobs and growth, making up over 90% of all micro and small and medium enterprises in the country. They also contribute 6.2% of GDP, and support around 3 million livelihoods. What is more striking is that more than half of these businesses are led by women.

But CGAP’s latest research also reveals a more complex picture. Some entrepreneurs are driven by survival. Others aspire to grow. And yet, most remain nano not by choice but because they are held back by stubborn barriers like limited fixed collateral, or gaps in their digital and financial literacy that make it hard to scale or build resilience.

Hello and welcome to another episode of Inclusive Finance Frontiers, a podcast by CGAP. I’m your host, Lamis Daoud.  

In this episode, we unpack the challenges small women-led enterprises face, particularly nano enterprises. We also explore how one country, Uganda, is working to unlock the economic potential of women entrepreneurs through digital inclusion and how policymakers, financial service providers, and development partners can design interventions that meet women where they are, and some are already doing that. 

We spoke with Gladys Kwalisima, a woman who lives in Mulimira in Uganda. She roasts corn and sells them to passers by. 

Gladys Kwalisima: I started because I didn’t have money, and I wanted to get some money for education like school fees and paying rent.

Lamis Daoud: She said she hasn’t approached a financial institution for support.  

Gladys Kwalisima: I am scared that I might fail to have the money to pay back. The profits I get are small. If they lend me, I might find it hard to pay it back.

Lamis Daoud: Gladys puts some of her profits, though, in a savings account.  

Gladys Kwalisima: I save with a savings group. We have just started saving now three months. I am saving so I also buy a plot of land and build.

Lamis Daoud: But her entrepreneurial journey has not been easy.  

Gladys Kwalisima: I got some challenges and things are not good because now even the maize corn I sometimes get it on credit, and I sell and pay later but without profits.

Lamis Daoud: Her message to financial institutions is this:  

Gladys Kwalisima: I am asking them. Could you help add on my business capital?  

Lamis Daoud: To help us understand the landscape in which women nano entrepreneurs, like Gladys, operate, we spoke with Sandra Nakabiri, senior economist with Uganda’s Ministry of Finance, Planning and Economic Development.  

Sandra Nakabiri: When you look at women and in the micro and nano [00:01:00] enterprises, you're generally looking at the heartbeat of Uganda because you're looking at that woman who is a market vendor in your nearby area, you're looking at that coffee farmer in that rural area. And you're looking at a lady who is running the salon probably.  

And we've seen that over the years, women entrepreneurs are increasingly growing and their business potential is expanding mostly in the rural areas. But with that, they've had so many limitations. And one of the major limitations they have is access to credit. And this will make them not be able to move from the survival enterprise and then to grow the business.

But the issue of access to credit comes a lot from really structural issues or historic issues. For example, there will be issues around collateral and asset ownership. You realize that  

traditional lending basically looks at fixed collateral and most women may not have that. They will have livestock, they'll have eventually equipment, which traditional lenders won't really look at.  

Lamis Daoud: Access to credit is only one part of the story, albeit a large part. But there are other challenges, too.

Sandra Nakabiri: If you look at the education system, ladies are less educated than the men. That means you may not easily have access to things like basic training, like preparing a loan application. Then there are other factors like access to markets.

Lamis Daoud: And layered on top of this are caregiving responsibilities, which often limit the time and flexibility women have to seek training, financing, or new markets.  

One organization has been trying to address the credit gap by making women more visible to financial institutions. GnuGrid is the first Indigenous Credit Reference Bureau licensed by the Bank of Uganda in 2021 that provide credit reporting and related services. What sets GnuGrid apart is its focus on inclusion through alternative and digital data for last-mile Ugandans, who are often remote populations underserved with essential services. GnuGrid works with banks, microfinance institutions, Savings and Credit Cooperatives, Village Savings and Loans Association, and fintechs.

Gladys Kwalisima: I started because I didn’t have money, and I wanted to get some money for education like school fees and paying rent.

Lamis Daoud: She said she hasn’t approached a financial institution for support.  

Gladys Kwalisima: I am scared that I might fail to have the money to pay back. The profits I get are small. If they lend me, I might find it hard to pay it back.

Lamis Daoud: Gladys puts some of her profits, though, in a savings account.  

Gladys Kwalisima: I save with a savings group. We have just started saving now three months. I am saving so I also buy a plot of land and build.

Lamis Daoud: But her entrepreneurial journey has not been easy.  

Gladys Kwalisima: I got some challenges and things are not good because now even the maize corn I sometimes get it on credit, and I sell and pay later but without profits.

Lamis Daoud: Her message to financial institutions is this:  

Gladys Kwalisima: I am asking them. Could you help add on my business capital?  

Lamis Daoud: To help us understand the landscape in which women nano entrepreneurs, like Gladys, operate, we spoke with Sandra Nakabiri, senior economist with Uganda’s Ministry of Finance, Planning and Economic Development.  

Sandra Nakabiri: When you look at women and in the micro and nano [00:01:00] enterprises, you're generally looking at the heartbeat of Uganda because you're looking at that woman who is a market vendor in your nearby area, you're looking at that coffee farmer in that rural area. And you're looking at a lady who is running the salon probably.  

And we've seen that over the years, women entrepreneurs are increasingly growing and their business potential is expanding mostly in the rural areas. But with that, they've had so many limitations. And one of the major limitations they have is access to credit. And this will make them not be able to move from the survival enterprise and then to grow the business.

But the issue of access to credit comes a lot from really structural issues or historic issues. For example, there will be issues around collateral and asset ownership. You realize that  

traditional lending basically looks at fixed collateral and most women may not have that. They will have livestock, they'll have eventually equipment, which traditional lenders won't really look at.  

Lamis Daoud: Access to credit is only one part of the story, albeit a large part. But there are other challenges, too.

Sandra Nakabiri: If you look at the education system, ladies are less educated than the men. That means you may not easily have access to things like basic training, like preparing a loan application. Then there are other factors like access to markets.

Lamis Daoud: And layered on top of this are caregiving responsibilities, which often limit the time and flexibility women have to seek training, financing, or new markets.  

One organization has been trying to address the credit gap by making women more visible to financial institutions. GnuGrid is the first Indigenous Credit Reference Bureau licensed by the Bank of Uganda in 2021 that provide credit reporting and related services. What sets GnuGrid apart is its focus on inclusion through alternative and digital data for last-mile Ugandans, who are often remote populations underserved with essential services. GnuGrid works with banks, microfinance institutions, Savings and Credit Cooperatives, Village Savings and Loans Association, and fintechs. 

We spoke with the managing director, Dr. Sumayyah N.S. Mutagubya to learn more about the bureau. 

Sumayyah N.S Mutagubya: There's quite a high number of women in Uganda that are economically active, but they are invisible in the traditional credit systems, especially the ones that are operated by formal financial institutions, because they lack access to, for example, mobile funds, they transact in cash.  

Most times, even when they borrow, they take out small ticket size loans. What's quite interesting, even with those limitations, they have a focus on repayment reliability over scaling up their businesses. There's just a very small percentage of them, I would say less than 30% that are able to secure a formal loan in Uganda.

And so, because of that, there's a big gap between their entrepreneurship and their financial inclusion. And, I believe that the logic is actually not because of lack of inspiration from them. It's a rational response to the structural constraints there for them. They are quite resilient, but their financial behavior is not captured in terms of credit history.  

Lamis Daoud: GnuGrid saw an opportunity to close this gap through digital inclusion and help women like Gladys become more visible. 

Sumayyah N.S Mutagubya: So the way we address this as a bureau is by capturing both conventional and alternative data, because you find that there are women that do not own a bank account, there are women that have never borrowed from the formal institution, but these are women that own SIM cards.

In Uganda, you'll find, probably two out of 10 women own bank accounts, and even take loans from banks, but 10 out of 10 own SIM cards. And so that history of their borrowing is important for us to capture.  

Lamis Daoud: By partnering with Airtel and MTN, the leading mobile service providers in Uganda, GnuGrid began building mobile credit scores.

Sumayyah N.S Mutagubya: Through our partnership with Airtel, we've been able to innovate a mobile credit score that turns everyday usage of Ugandans and their repayment behaviors into what we call a trusted financial signal or a credit score.

We've also been able to pilot a Universal Loan Checker, which allows financials or financial institutions to see a borrower's exposure across multiple networks of Airtel and MTN. And so, what that means is both SIM cards are able to improve their loan box because they're able to have visibility from two of the giant telcos.

But most importantly, we've also been able to innovate what I call a loan market using Airtel data, which allows the millions of Ugandans to be able to compare the different offers that are given by financial institutions and the different terms that these financial institutions have, and choose what works best for them in accordance to their credit score.

Lamis Daoud: And GnuGrid didn’t stop there. They also set out to tackle other structural challenges head-on.  

They designed digital financial solutions that work even for women with low literacy or limited access to smartphones, ensuring that women can check their credit scores on basic phones. And they also offered a WhatsApp chatbot for easy, 24/7 access to credit products.

These tools are complemented by financial literacy workshops delivered in multiple local languages — critical in a country as linguistically diverse as Uganda. At the institutional level, GnuGrid also built a web-based portal that allows financial institutions to access credit products and services more easily. Together, these innovations are helping close long-standing gaps.

But building credit scores whether by GnuGrid or other licensed credit reference services in Uganda is just one piece of the puzzle. An ecosystem-wide approach is often needed to support these innovations and help unlock the full economic potential of women entrepreneurs in Uganda and beyond. So how can policymakers, financial service providers, and development partners design tailored interventions that meet women where they are?  

We turn back to Sandra to learn about the role the Ministry of Finance has been playing.  

Sandra Nakabiri: You always need partnerships for government to work together with the private sector so that they build the ecosystem together. There are issues around getting credit because of lack of collateral. So we are looking at reforms where they can be a collateral registry for movable assets, which will increase access to credit for women. We also have the parish development model where they give finances to each parish.  

30% of this is reserved for women.  

Then access to policy. Realistically, generally speaking, the women have little access to policymakers. If you look at a typical Ugandan setting, you will barely see women in the major boardrooms where decisions are made.  

We have to come from a point where we realize that there's no one size fits all policy. Look at a woman who is a 19-year-old hairdresser. The things that affect her will be different from a 50-year-old hairdresser, irrespective of the fact that they end the same business. So have disintegrated gender data so that it informs an effective policy, then have affirmative action even around the policies.  

Lamis Daoud: For both Sumayyah and Sandra, good data is key to addressing the challenges women-led nano enterprises face.  

Sumayyah N.S Mutagubya: Risk cannot be managed through denial. It can only be managed through using the data that this woman has to create and build products that speak to her risk that speak to her credit score.

Sandra Nakabiri: If we cannot measure it, we cannot fix it. Look at a world where we'd know the data on women by age, location, business, attrition rate, then you have better planning, you have better targeting. If data is reliable, it's a foundation for effective policy.  

But also having effective data can show you some statistics. For example, statistics shows that women are better at repaying loans. So you wonder, given that statistic, if data will be able to advocate for financial service providers to provide us with loans because they know we are better at managing the repayments if we have products that are tailor-made for us.  

Lamis Daoud: So, what’s next for Uganda? According to Sumayyah, doing nothing is not an option.  

Sumayyah N.S Mutagubya: So one of the biggest lessons that we've been able to learn at GnuGrid is that exclusion is actually a form of risk. Because when these women are actually locked out of formal credit, borrowing does not stop. It simply shifts to informal channels, because they're not able to access credit from formal institutions. And informal channels previously were excluded from having visibility or even having consumer protection.

My call to action is for everyone that is thinking about financial inclusion, thinking about access to finance, thinking about women-led businesses, thinking about inclusive finances, is to address the unique challenges that women face and not build products just to tick off a few checkpoints. Because if we do that, then these challenges will still not be addressed.  

Lamis Daoud: And Sandra reminds us that the future needs to be designed with input from women.  

Sandra Nakabiri: We need to consider designing with women in mind. Most service providers will say that they have designed products for women, but you don't need to design for the woman without her being in the design process. Then consider use of movable assets and digital footprint. Then reserve real procurement opportunities for women suppliers, and as well share data so that you can better target. Because once you grow the nano or micro woman, Uganda as a country will grow for generations.  

Lamis Daoud: That’s the end of our podcast today. Thank you so much to everyone we interviewed: Sandra, Sumayyah, and Gladys.  

And of course, thank YOU, for joining us for this episode of Inclusive Finance Frontiers, a podcast by CGAP. I’m your Lamis Daoud.

For more information on our work in inclusive finance and other topics, please visit our website at cgap.org.    

And if you liked this episode, please be sure to share it with friends and colleagues so more people can hear how inclusive finance is transforming lives.