Wednesday, November 21, 2018


Last week Stanbic bank signalled a shift in how they do business with the launch of their “Wealth Value Proposition”.

The new offering will go beyond the traditional banking services to include introducing their clients to their insurance and wealth management products provided by their affiliates Liberty and Stanlib, respectively.

The bank by gaining an intimate knowledge of how they make and spend their money, advising on saving and investment and helping them plan and protect their money, will help its clients improve their financial health in the short term and ensure they leave behind a durable financial legacy. This service will be offered to their individual and corporate clients.

"If executed properly this single initiative will not only boost Stanbic’s bottom line (as if they needed any more help) but be good for the economy as a whole....

For the bank it will be a shift away from churning out products to actually paying attention to what their clients’ aspirations are, putting their resources and expertise at the service of attaining these goals.

For individuals it will bring for the first time, in the vast majority of cases, an appreciation of financial literacy in a very practical way, not the “information”  being peddled by snake oil salesmen.
But the real benefit will be to businessmen, particularly the Small & Medium sized Enterprises (SMEs).

According to the bank, in Uganda only one in four businesses opened live to see their third birthday. The fold because mostly because they don’t know what to do and don’t know where to go for help.
Relatedly there are serious gaps in the financial industry that make it difficult for small business to access appropriate credit for their stage of development.

As it is now the financial industry is dominated by the commercial banks, which are ideally suited to working companies with regular or growing revenues, dealing in predictable products and services.

Between scrapping together personal savings and relying on the generosity of friends and family to the point where a business can gainfully engage with commercial banks, there is a dearth of the kind of financial services SMEs require to not only rise to the next level but to survive.

In other markets there is vibrant business support services segment  – often run by the government, which helps small businessmen with help in market research, incubation, mentorship programs, grants and loans.

If a business outgrows this help it might then be taken over by the venture capitalists, people who are willing to finance and handhold a business’ through its teething pains, for a share in the company. 

The private equity crowd are more the same but they play at a higher level.

While attrition rates are not very different around the world, the difference under such circumstances is that the surviving businesses have a better chance at growth and durability than our own businessmen who rarely ever reach that point of sustainability.

This is what Stanbic is getting itself into.

"It is inevitable because once the bank gets intimately involved with its clients’ businesses and works to come up with solutions, they will find themselves going down paths, creating products they had no clue they would be involved in. Which is as it should be...

Now imagine if this new initiative, rolled out across Stanbic’s nationwide 72-branch network, is executed half as well as is intended and even one  hundredth of the bank’s half a million clients  or 5,000 business are touched, the ensuing sea change in the economy would be huge.

Imagine the businessman who up to this point has seen the bank only as an avenue for banking and withdrawal of those same monies, then now learns to organise his books (he thought that was only for big companies), to think strategically ( how do you spell strategy?), to identify and appraise opportunities ( he thought he would be shopkeeper till he died), how to protect his hard earned wealth (he thought he would eat all he made by the time he died) and provide for future generations.

A country’s economy is only as viable as the quality of its private sector. The private sector creates jobs, pays the taxes and its proprietors are instrumental in maintaining national stability. This is more so when the captains of commerce and industry are indigenous players.

"We pay lip service to helping the private sector because truth be told our government and technocrats have no clue what it takes to do business. Stanbic is climbing over the table to help their clients, if their clients thrive they thrive too. There is a very real self interest in what they are doing.

We can bet that others will follow suit in days to come, which will only widen the surface area for change and setting up the economy for the next level.

Monday, November 19, 2018


The bottlers of Coca Cola, Century Bottling Company, recently released a new product onto the market – milk!

Yes. You read right! Their new brand of beverage going under the brand name Climb Up is bottled flavoured milk -- Vanilla, Mango, Strawberry and Chocolate flavours.

That would be as interesting as it got, were not for the factor that the new product is drawing largely from local producers and suppliers.

For the second half of this year the beverages company plans to consume 13.5 tonnes of powdered milk and 18 tonnes of sugar, with a commensurate amount of labelling, packaging and plastic bottling all provided by local suppliers.

The local producers and suppliers now being allowed a look in on the multinationals marketing and distribution network it is safe to assume will cause dramatic changes in those industries.

Take milk.

"It takes 8.5 liters of milk to get a kilogram of powdered milk. So Century Bottlers current powdered milk commitment will account for about 114,750 liters of fresh milk. While this demand doesn’t dent Uganda’s current annual 2.5 billion liter production, there is cause for optimism looking down the line...

There are few other companies in Uganda that can stand toe to toe with the Coca Cola makers marketing reach and experience.

One can expect that with the company’s marketing and distribution network being brought to bear on their latest offering their demand for milk will grow exponentially.

The latest news from the Dairy Development Authority (DDA) is that thanks to our increased exports of milk to our eastern neighbour Kenya we have reversed the historical trade imbalance between our two countries. And as if that is not enough we have just overtaken South Africa as the continent’s largest exporter of dairy products.

Industry players say there is still a lot of potential for milk production in western, eastern and northern Uganda and it is reasonable to think that Century Bottling will play an instrumental role in this endeavour.