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Money Lending Business Plan in Uganda: Guide + Example

• Author Content Team
• Published October 11, 2023

Starting a money lending business can be a lucrative opportunity in Uganda given the high demand for loans and lack of adequate formal lending institutions. However, a thorough business plan is crucial before venturing into this industry.

A money lending business provides small, short-term loans to individuals and businesses unable to access credit from banks and other financial institutions. The loans attract an interest rate higher than traditional banks. This business plan will focus on key areas to consider when starting a money lending operation in Uganda.

Some key benefits of this business opportunity include:

• Huge unmet demand – Only 9% of Ugandans have access to formal credit creating a gap for private lenders.
• High-interest rates – Money lenders can charge 2-10% monthly interest enabling attractive profits.
• Low startup costs – The business can be started small with minimal regulatory compliance.
• Flexible lending terms – Private lenders can offer more flexible loans than banks.

This business plan will provide an analysis of the Ugandan money lending industry, detail operational requirements, provide financial projections and suggest strategies for launching and growing the business profitably. With proper planning and execution, a money lending startup can be highly successful in Uganda’s fast-growing credit market.

Key Takeaways

• Huge unmet demand for loans coupled with favorable lending terms provides lucrative opportunity for money lenders in Uganda.
• The target market comprises of unbanked individuals and micro-enterprises needing small personal and business credit.
• Effective operations and risk management are vital to ensure profitability and compliance.
• Starting as a private limited company with adequate capital and licenses is advisable.
• Competitive advantage can be built through efficient loan processing, strong customer service and partnerships.
• Marketing efforts must focus on targeted customer acquisition and building brand awareness.
• Ongoing diligence in credit analysis, fraud prevention, collections and regulatory monitoring is important.
• Financial projections indicate high profit potential for a well-run money lending operation in Uganda.

Money Lending Business Plan in Uganda

Market analysis.

Performing thorough market analysis is crucial to assess the opportunity and viability of a money lending business in Uganda. Key factors to analyze include:

Market Size

• Uganda has a large unbanked population estimated at over 15 million people without access to formal financial services. This creates a huge market for private money lenders.
• The microfinance industry in Uganda is valued at over UGX 300 billion indicating high demand for credit.
• Uganda has over 200 licensed money lenders currently operating. This number is rapidly growing showing the lucrative opportunity.

Demand and Growth Trends

• High annual demand growth of around 15% is projected for the money lending industry in coming years.
• Key growth drivers include an increasing working population, growth of small businesses and lack of credit history among borrowers locked out of the banking system.
• Demand is higher in urban areas and regions with vibrant economic activity like Kampala and Wakiso.

Customer Demographics

• The target borrowers include salaried workers, small business owners, traders, farmers and casual laborers.
• Typical loan amounts range from UGX 50,000 to 5 million .
• Loans are taken for purposes like business capital, school fees, medical expenses, household needs and emergencies.
• Majority of customers are market vendors, boda-boda riders, small shop owners and other micro-enterprises.

Competitor Analysis

• Main competitors are other money lenders, microfinance companies and savings cooperatives.
• Many lenders are unregulated resulting in uneven competition.
• Key success factors in this industry include; speed of loan processing, flexible terms, strong collections and personalized customer service.
• New entrants can compete by leveraging technology, offering unique products and building strong relationships.

This analysis shows that launching a licensed, compliant money lending operation with an efficient lending process and strong brand can be highly successful in Uganda’s growing credit industry. The key is remaining informed on market trends and competitors .

Business Model and Operations

The business model and operations have to be structured appropriately for an efficient and compliant money lending business. Key aspects include:

Business Structure

• The recommended business structure is a private limited liability company . This offers protection of personal assets.
• Additional shareholders can be brought in for capital injection as the business grows.
• Hiring a lawyer to help register the company is advisable to ensure proper compliance.

Licensing and Regulations

To operate legally, the business needs:

• A money lender’s license from Uganda Microfinance Regulatory Authority. This costs UGX 500,000 annually.
• Trading license and tax clearance from Uganda Revenue Authority.
• Adherence to [Money Lenders Act] laws like maximum interest rates, proper contracts and fair treatment of borrowers.
• Joining a credit reference bureau for credit checks on borrowers.

Lending Policies and Procedures

• Develop clear lending criteria based on borrower creditworthiness.
• Standardize loan application process and documentation requirements.
• Use credit scoring models and risk assessment tools to evaluate applications.
• Structure flexible loan amounts, tenors, repayment schedules and acceptable collateral.
• Offer quick loan processing and disbursement contingent on approvals.

Loan Management

• Use software to manage the loan portfolio lifecycle – origination, approvals, disbursement and collections.
• Track loan performance through monitoring tools and reports.
• Maintain up-to-date customer credit files.
• Develop robust processes for collections on delinquent accounts.

Following the legal requirements and implementing efficient systems will create a successful lending operation. Ongoing review of policies is also important to maximize returns.

Financial Planning and Projections

A thorough financial plan is critical to determine the startup and operating costs for the money lending business. It also helps forecast potential revenues and profits.

Startup Costs

The key startup costs include:

• Incorporation and licensing fees – UGX 1 million
• Rental office space deposit – UGX 5 million
• Furniture and equipment – UGX 2.5 million
• Staff salaries – UGX 3 million per month
• Marketing and promotion – UGX 1 million
• Contingency funds – UGX 2.5 million

Total Estimated Startup Cost: UGX 15 million

Revenue Forecasting

• Average loan size – UGX 500,000
• Number of loans per month – 100 loans
• Average interest rate – 2% per month
• Monthly revenue – UGX 10 million
• With portfolio growth of 5% monthly, first-year revenue is projected at UGX 150 million

Operational Expenses

• Staff salaries – UGX 4.5 million monthly
• Office lease and utilities – UGX 1.5 million
• Loan management software – UGX 250,000
• Marketing – UGX 500,000 monthly
• Estimated monthly expenses – UGX 7 million

Profitability

• With forecasted revenue of UGX 150 million and expenses of UGX 84 million, the annual pre-tax profit is UGX 66 million.
• This equals an excellent profit margin of 44%.

Careful financial planning indicates this money lending business in Uganda can be highly profitable with appropriate startup capital and effective operations. The projections will be refined as the business develops.

Marketing Plan

An effective marketing strategy will be crucial to reach target customers and grow the loan portfolio. Key initiatives include:

Marketing Strategy

• Focus on geographic locations with high concentrations of potential borrowers requiring small personal and business loans. These include urban centers and trading hubs.
• Build a strong brand identity that conveys trust, professionalism and excellent customer service.
• Develop fast, convenient lending programs that flexibly meet customers’ needs.
• Employ digital marketing like social media and Google Ads to attract web searches for loans in the target areas.
• Maintain a centralized, accessible office to handle walk-in inquiries and loan applications.
• Launch a professional website with an online loan application form to accept applications digitally.
• Partner with equipment suppliers, agricultural input shops, schools and landlords to market the lending services to their networks and collect repayments.
• Attend trade fairs and set up booths to interact with potential small business customers.
• Run periodic radio promotions advertising the unique benefits of the lending services.
• Print brochures, fliers and branded merchandise to increase visibility.
• Incentivize referrals with commission on successful customer leads.
• Reward loyal repeat borrowers with discounted rates and higher loan amounts.

Brand Awareness

• Sponsor relevant community and industry events allowing display of banners and networking.
• Cultivate relationships with key influencers who can connect the business with new borrowers.
• Issue press releases on news announcements like product launches and partnerships.
• Maintain strong social media presence with frequent, engaging posts on Facebook, Instagram etc.

This marketing mix focused on targeted customer acquisition, partnerships and promotions will drive portfolio growth and establish a recognized money lending brand in Uganda.

Read also: Money Lending Marketing Plan in Uganda: Guide + Example

Risk Management

Managing the lending risks effectively is crucial for the profitability and long-term viability of a money lending business. The key risks and mitigation strategies include:

Credit Risk

• Risk of customers defaulting on loans, negatively impacting revenue.
• Thorough credit checks on all applicants
• Consistent adherence to prudent lending policies
• Obtaining collateral and guarantees where possible

Operational Risk

• Risks of processes, systems or staffing failures impacting activities.
• Documented policies, procedures and controls
• Ongoing staff training on operations
• Dedicated risk and compliance functions
• Risks of applicants falsifying documents or information for loans.
• Strong applicant identification processes
• Integrity checks on documents submitted
• Monitoring early-stage delinquency as fraud indicator

Regulatory and Compliance Risk

• Risk of lawsuits, fines or licensing issues due to non-compliance.
• Ongoing review of lending laws and regulations
• Regular compliance audits
• Legal counsel on regulatory changes

Managing Capital Risk

• Inadequate capital leading to inability to disburse loans.
• Maintaining sufficient liquid reserves
• Engaging investors for capital injections
• Pursuing access to credit facilities

Proactive identification, monitoring and timely mitigation of the key lending risks will enable the business to maximize returns while protecting against adverse events. The risk management framework requires continuous review and enhancement.

Starting a money lending business in Uganda has strong growth prospects supported by rising demand for credit, favorable lending terms and a largely unbanked population. This business plan provides a blueprint for establishing operations by highlighting the licensing requirements, policies, systems, marketing strategies and risk management needed.

Careful implementation along with adequate startup funding can lead to a highly profitable money lending enterprise. The regulatory framework also needs to be monitored regularly.

Overall, this business represents an attractive opportunity to meet unmet market needs while earning significant returns on the loan portfolio. With the right execution, a new money lending venture can flourish in Uganda.

• How to Get a Money Lending License in Uganda: A Step-by-Step Guide
• How to Start a Money Lending Business in Uganda

Business Plan Outline

1.0 executive summary.

• 1.1 - Introduction
• 1.1.2 - Brief on the Project Proposal: what the project entails
• 1.2 - Brief on the Applicant
• 1.2.1 - Legal Status
• 1.2.2 - The Directors / promoters – personal details, Qualifications, experience
• 1.2.3 - Statutory Obligations/Corporate Governance Practices (operating license / registration compliance, PAYE, NSSF, NEMA where applicable and any other)
• 1.3 - Past Financial Performance

2.0 Market Analysis

• 2.1 - The Product(s)/Services and Product /Service Description
• 2.1.2 - Future Products if any
• 2.2 - Industry Analysis
• 2.3 - Demand Analysis
• 2.4 - The Prices
• 2.5 - Competition –analysis and comparison
• 2.6 - Marketing/Sales and Distribution programs / strategies

3.0 Technical Aspects

• 3.1 - Location – description, accessibility, utilities
• 3.2 - Existing Infrastructure and assets (e.g. land & buildings, vehicles, furniture, equipment, machinery)
• 3.3 - Projected Volume of Production/Enrolment/Occupancy Rates
• 3.4 - Production/Process Flow where applicable
• 3.5 - Raw Materials and labour Availability

4.0 Implementation

• 4.1 - Implementation Time Table

5.0 Organisation and Management

• 5.1 - Organization Structure
• 5.2 - Management – Current key personnel and qualifications and future arrangements
• 5.3 - Manpower Schedule and Remuneration

6.0 Financial Aspects

• 6.1 - Total Project/ Investment Costs
• 6.2 - Source of Financing
• 6.3 - Working Capita
• 6.4 - Assumptions of the financial projections
• 6.5 - Projected Profit and Loss
• 6.6 - Projected Cash Flow
• 6.7 - Key Financial Indicators/Business Ratios

7.0 Risk Analysis and Proposed Mitigation

• 7.1 - Market Risks
• 7.2 - Political and Economic Condition
• 7.3 - Foreign Exchange Availability
• 7.4 - Financial Risks
• 7.5 - Others Risks if any

8.0 SWOT Analysis

9.0 socio-economic aspects.

• 9.1 - Employment
• 9.2 - Government Revenue

10.0 Environmental Aspects

• 10.1 - Key Aspects of Environmental Concern
• 10.2 - Action to be undertaken by Promoter to address environmental concern if any

11.0 Final Observations

General inquiries.

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The ultimate guide to starting a small business in uganda.

May 18, 2023

Starting a small business in Uganda can be an exciting and rewarding endeavor. With the country’s growing economy and supportive government policies, entrepreneurship has become a popular choice for many Ugandans. However, starting a small business can also be a daunting task, especially if you don’t know where to begin. In this guide, we’ll take you through the step-by-step process of starting a small business in Uganda.

• Choosing the Right Business Idea

The first step in starting a small business in Uganda is choosing the right business idea. This involves identifying the gap in the market that your business will fill. Conducting market research is also crucial at this stage. This will help you understand the customer, identify your target market, and analyze your competitors. You should also assess your personal skills and passion to ensure that you’re setting yourself up for success.

2. Developing a Business Plan

Once you have a business idea, the next step is to develop a business plan. A business plan is a comprehensive document that outlines your business’s goals, market analysis, financial projections, marketing strategy, and operational plan. Having a business plan is important as it helps you clarify your objectives, identify potential challenges, and attract investors. There are several steps to create a business plan, and it’s important to ensure that it’s well-crafted and detailed.

3. Funding Your Business

After developing your business plan, the next step is to secure funding for your business. There are various sources of funding, including self-financing, loans and grants, and other sources of funding. It’s important to assess how much money you need to start your business and identify the best source of funding for your business.

4. Registering and Legalizing Your Business

Registering and legalizing your business is an essential step in starting a small business in Uganda. There are various types of business structures to choose from, including sole proprietorship, partnership, and limited liability company. You’ll need to register your business with the relevant authorities and obtain the necessary permits and licenses before you can start operating.

5. Setting up Your Business

Setting up your business involves choosing the right location, acquiring the necessary equipment and supplies, and staffing your business. It’s important to ensure that you have a suitable location that’s easily accessible to your customers. You should also invest in high-quality equipment and supplies to ensure that your business runs smoothly. Staffing your business is another crucial aspect, as you need to hire the right people who will help your business grow.

6. Marketing and Promoting Your Business

Marketing and promoting your business is essential if you want your business to succeed. Developing a marketing plan is crucial as it helps you identify your target audience and choose the most effective marketing strategies. There are several cost-effective marketing strategies, including social media marketing, print advertising, and event marketing.

7. Managing Your Business

Managing your business involves financial management, operations management, and human resource management. It’s important to keep track of your financial statements and take steps to manage your cash flow effectively. You should also ensure that your operations run efficiently and be prepared to adapt to changes in the market. Human resource management involves hiring the right people, providing adequate training, and creating a positive work culture.

Challenges Faced by Small Businesses in Uganda

Small businesses in Uganda face several challenges, including access to finance, lack of business skills, and market competition. It’s important to be aware of these challenges and take steps to overcome them. This can include seeking support from business development organizations and investing in training and professional development.

Starting a small business in Uganda is an exciting and rewarding venture. By following the steps outlined in this guide, you’ll be well on your way to setting up a successful small business. Remember to conduct market research, develop a comprehensive business plan, secure funding, register your business, and invest in marketing and management. With dedication and hard work, your small business in Uganda can thrive.

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• June 3, 2021

How to start a business in Uganda

In this article :

Introduction

Step 1: conduct research, step 2: write a business plan, step 3: source and plan for capital, step 4: choose a business structure, step 5: register your business, step 6: acquire business licenses and permits, step 7: select a suitable location, step 8: recruit skilled employees, step 9. open and advertise your business, the best 10 business sectors to invest in uganda.

In Uganda, the majority of the local population are looking to start put-up businesses with hopes of diversifying their income. The business opportunities in Uganda have made it possible for almost 10% of youths to start up businesses . And while all these figures sound great, a 1/5th of those businesses tend to fail in the first year of operations

It would be in your best interest to find a viable business with a fairly low amount of risk for such reasons. But with so many business opportunities in Uganda, where would you start?

The following article sheds light on top businesses in Uganda and their relevant industries. But first, consider the following steps before starting a business in Uganda.

If you already have a desirable business idea, you should evaluate its viability and cross-reference it with your plans. Start with researching Uganda’s market through focus groups, prospect customers, conversations with those who have succeeded in your field of interest.

Conducting thorough market research will clarify your perspective about the business feasibility. In the United States alone, companies spent approximately $73 billion on market research in 2019 , intending to gain deeper market insights for business development. Such figures show the importance of market research.

A business plan summarizes how you intend to organize and implement the various essential activities necessary and sufficient for the venture to succeed. This is why plotting a business plan is one of the most crucial aspects of your business to succeed.

According to research, having some form of a business plan can help your company grow 30% faster . Therefore, you should take time and come up with a standard, feasible and realistic business plan. Also, remember proper planning prevents poor performance.

One factor to consider when writing a business plan is the capital you will spend to provide a product or services to your customers. Evaluate how you will expand the volume of your business using a combination of equity, technology and skilled labor.

Before you seek financial help, you need to create a budget for your initial period. This will guide you on the amount of money you need and how to allocate it. Your budget should include; Rental costs for your premises, company registration costs, capital for the inventory, salary bills, transport, among other business overheads.

But, if you have limited financial resources, take the initiative of consulting the existing financial institutions like banks for business financing options. Also, personal savings, grants and soft loans from family members are convenient sources of capital.

A business can be a sole proprietorship, a limited liability company, or a limited company in Uganda. The type of business will influence key activities like paying taxes, the number of individuals you employ, and the choice of the business name.

Suppose you are not knowledgeable enough on which entity or structure to take up. In that case, Therefore, you might want to consult lawyers, business advisors and other key stakeholders to get a better sense of the business structure that you will follow.

The name you choose for your business should be thought through critically. Usually, you are required to apply for the picked name by the Uganda Registration Services Bureau . The name is then searched through a database to pass the similarity, desirability tests to ensure its availability.

In the case of successful results, you can then proceed to start a business any day. If results show similar names, then another has to be selected until it passes this stage.

The type of licenses and permits you are obligated to acquire depends on the class of business and the location you choose. Uganda, just like most countries, has different laws when it comes to acquiring business permits and other operational licenses.

Talk to the relevant Ugandan authorities to get a better understanding of licenses and permits. This paperwork is vital before you can legally operate the business. It’s highly advisable to have a lawyer present during the registration.

Uganda recently passed new regulations surrounding the sharing of workspace through hubs that support young people looking to start a business. Business owners are now required to choose between buying or renting working premises.

Remember, other factors like the cost of production and transport play a massive role. If you intend to reduce the costs incurred in production, and transportation your location should either be next to the market or the source of raw materials. All these arrangements will also depend on the type of business.

If your business requires employees, you should recruit a team of workers. However, take your time to Identify the various positions to be filled and stipulate the responsibilities and skills needed by your future employees.

It does not matter if you are a sole proprietor; you still need to organize your team, including mentors, family, or business coaches, who will support you in the process.

If you are a foreign investor looking to make investments in Uganda, consider using staffing and recruiting companies. Top employment organizations like Flexi Personnel offer recruitment services as they are well connected with talented employees and senior managers.

Now that your business is up and running, you need to lay strategies to attract more customers to your business. Remember, you are the business owner; you know best who your customers are, so only you can best understand how you want to be noticed by them in the market.

Uganda has become one of the best places to do business in Africa, as it is endowed with a landscape of new roads and infrastructures like shopping malls, hotels, and apartments. This offers entrepreneurs various business opportunities to venture in.

You can start a profitable business anywhere in Uganda with sufficient capital. And with more capital, you can venture into bigger businesses like real estate and property sales and management. There are several business opportunities in Uganda, and here are

In Uganda, the secret to making successful investments lies in identifying any business that caters to people’s everyday needs. For instance, selling products in high demand will make you profits.

Some of the trading businesses you can start with a capital of less than $100 include; selling secondhand clothing, firewood, newspapers, foodstuff, frozen fish, or drinks. Also, with a capital of more than $1,000, you can open a small restaurant, a coffee shop, a mobile phone accessories store, a grocery store, a cosmetic product store, a supermarket, or a jewellery store.

With that said, the following are the top sectors in Uganda that you should consider investing in.

Food Processing

Much of the food consumed in Uganda is imported . Therefore, the tendency of the country to spend millions of dollars annually on food importation creates huge opportunities for businesses that produce and process foods locally.

The food and drink sector in Uganda accounts for roughly 21% of the country’s total GDP (gross domestic product). It also accounts for about 46% of the country’s total export revenue, generating jobs for more than half of Uganda’s population.

The Ugandan dense population–especially in the urban areas–offers a ready market for food, increasing the demand for quality food. If you have a low capital base, you can start a small food processing business offering value-added processed foods like grains, nuts, cereals, fruits, and vegetables.

Construction Industry

With a capital of less than $1000, you can start a brick-making business that makes and sells cement blocks or stabilized earth bricks. Also, there is a growing demand for construction products and services due to the increasing number of new buildings and structures in Uganda.

However, with a capital of more than $10,000, you can venture into a concrete pipes-making business or start a business that leases construction machinery such as trucks, asphalt mixers, bulldozers, concrete mixers, concrete vibrators, etc.

In addition, with a capital exceeding $50,000, you can either establish a plant making concrete slabs, beams, pillars or lease sophisticated construction machines to big construction companies.

Real estate

Real estate is another rapidly expanding sector in Uganda that you can explore. With sufficient capital, you can start a real estate business by offering low-cost houses for sale.

The sale of medium-cost houses requires a capital somewhere between $50,000 and $100,000.  You will require a start-up capital above $100,000 to invest in houses such as residential villas, apartments, office space, and housing estates.

Small manufacturing industries

Small manufacturing industries are small-scale businesses that manufacture products that are in high demand. And can be started with capital between $1000 and $10,000.

For example, you can start a sewing or tailoring business producing clothing for men, women, and children. Also, you can invest in businesses that offer printing, typesetting services, furniture, or soap-making businesses with capital between $10,000 and $50,000. And if your capital exceeds $100,000, consider starting a business that manufactures plastic wares.

Tourism and hospitality

Uganda is one of the most visited destinations in Africa because it hosts many domestic and foreign visitors annually. Therefore, there are opportunities for investors to make money off this tourist. With around $100,000, you can set up a resort or lodge for tourists. Also, you can set up a hotel or motel. But If you have little capital, it’s an option to turn your home or unused space into a bed and breakfast lodge for tourists.

Transport services

Transport is an everyday necessity, which explains why there is always a huge demand for transport services. With a big capital, you can start a business that offers intercity transport services. But if you are on a low budget, then consider investing in a local taxi service.

Cyber Café: Computer and Internet Services

With the increase in demand for quality internet services, both Small and Micro businesses need it for web conferencing and browsing. However, this business needs a specific budget, but it’s more scalable when you start small.

Also, the technological advancements in the internet have increased the need for being both computer literate and internet savvy. This is because many Ugandans are not familiar with computer operations. This creates opportunities for you to provide computer and internet services.

Digital Marketing

Most Ugandan businesses are going online by opening websites; therefore, they need digital marketers to improve their online visibility and advertise their opportunities. Also, being an online marketing company based in Uganda, you don’t just have access in Uganda, but the rest of the world too.

Laundry Services

Laundry and dry cleaning can prove to be a lucrative business in urban areas where more of the population is busy with their day jobs and have little time for laundry.

To get this business running, you need to acquire a washer/dryer, iron, and maybe an assistant. Also, you need a premise with a spacious interior and a consistent source of water.

Day Care Center

Another profitable business idea is the daycare centers for kids, especially in an n treasure. Most families have working moms. You can start with home-based daycare with an option for limited children too. However, you must equip the centre with entertainment facilities for both kids and human resources to manage them.

Solar energy

The growth of the renewable energy sector is revealed by the massive use of solar energy by the population. So, there are huge opportunities for businesses that offer solar panel installations and sell solar power accessories.

Other services

Apart from buying and selling, there are other lucrative businesses to venture into in Uganda. Opportunities also exist for service providers. Examples of services that are in high demand include hairstyling, mobile phone repair, barbing, furniture making, car rental, tractor leasing, and so on.

In Conclusion

Setting up a business in Uganda requires more than just capital. You should strive to educate yourself concerning the intricacies present in the Ugandan market. With that said, there are numerous business opportunities in Uganda. Not only that, but the government of Uganda has offered many incentives and subsidies to attract both local and foreign investments.

For such reasons, it would be in your best interest to consider the steps and sectors mentioned above in setting up your business in Uganda. It would also help if you got in touch with HR solution providers such as Flexi Personnel to help you get started.

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Business Planning Guide for Microfinance Institutions in Uganda

This guide presents a step-by-step procedure to assist MFIs in preparing a business plan.

MFIs need a good business plan to move in the right direction, raise money, prepare for the future and measure progress. The guide was developed by the Center for Microenterprise Finance (CMF), a component of the USAID funded PRESTO Project in Uganda. CMF aims to strengthen institutions that provide savings and credit services to microenterprises in Uganda.

The guide aims to help MFI managers in planning for their organization's development and creating a business plan. It builds on the foundation of microfinance best practices, including extensive outreach to the poorest, achievement of financial self-sufficiency through use of cost-covering interest rates and sound delinquency management. Through this guide, CMF seeks to assist MFI managers to:

• Understand the business planning process;
• Develop a mission statement for their organization;
• Assess their current situation;
• Determine their potential for development;
• Develop strategies for development;
• Produce portfolio projections;
• Project and analyze financial status;
• Produce a comprehensive business plan;
• Use a business plan as a management tool.

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How to start a poultry business in Uganda (2022).

Chips and chicken have become the commonest dish nowadays following the loss of time to cook or how easy it is to prepare the dish. This is good news for all prospective poultry farmers.

This post will introduce potential poultry farmers to some of the basics on how to start a poultry business/ farm. From understanding what type of chicken breeds would work best for their climate and terrain, all the way down to where they should buy them from. We’ll cover everything there is to know about this exciting adventure!

This post is not only suited for starters, if you are already a poultry farmer, you can also read through. You will find tips on how to improve your existing poultry farm.

Why start a poultry business /farm?

There are many reasons why you should start a poultry business. Some are listed below;

• You can start on a small scale.
• It doesn’t require a lot of startup capital.
• There is a ready market for chicken and its products.
• There are adequate resources and expertise in this field.
• Chicken rearing doesn’t require a lot of skill to do
• Chicken rearing doesn’t require a lot of land to carry out.

How to start a poultry business.

Write a business plan..

A business plan is very important in every business but most importantly in a poultry farm. You specifically need to;

Choose a production strategy.

As we shall discuss, there are many types of poultry, in the many types, there are subtypes too. You need to strategically look into this. What type specifically are you going to deal in. We shall look at this in this post but at a later stage. What factors should you consider when choosing a poultry type to deal in?

An example of a production strategy that I use is rearing broilers up to 4 weeks and selling them off.

Other strategies are;

• Yours can be, buying 4-week old broilers, rearing them, and selling them at a higher price.
• Rearing layers for eggs
• Raising kuroilers for eggs or meat. You need to come up with a good profitable one.

There are many more strategies. You just have to think about something that works Marvels for you.

Other key elements of the poultry farming business plan are;

Market analysis.

Market analysis is key and you need to take it seriously. It will show you areas of high demand, those without supply, and help you to come up with a sales mechanism and strategy.

Sales strategies.

You need to get a method through which you’ll be selling your chicken. Will you be supplying hotels and restaurants, hawking them and their products or otherwise?

We have a full post about How to write/ Come up with a business plan. It can guide you through the whole process.

Read More : How to write a business plan.

Choose a  breed of poultry.

There are many breeds of chicken currently being reared in Uganda. As a starter, you need to choose a breed based on your strategy and the amount of money you have.

Some of the breeds of chicken in Uganda.

Exotic breeds..

These are breeds of chicken that are not native to Uganda. These are in specialties. That is for meat, eggs, and multipurpose chicken.

• Broilers ( Meat breed).

These are for meat. They are usually white and can fatten to a weight of up to 6 kg live weight at maturity. A good business idea is to rear these up to an age of 4 weeks and dead weight of 1kg.

• Layers ( Eggs breed ).

These are egg-laying poultry birds raised mainly for the commercial production of eggs. There are many layer breeds in Uganda but all are under the brown category. These include the Bovans, ISA, and Hisex. The commonest are the ISA breed.

• Kuroiler ( multi-purpose i.e. Both eggs and meat)

Kuroiler chickens are the ones with indigenous or local traits but lay more eggs and mature faster in a period of up to 10 weeks to weigh up to 4 kg live weight. These mature faster than the locals and lay more eggs than the locals.

Local ( indigenous) breed.

These are the ones that originate here in Uganda. They are not good for commercial purposes as they take longer to grow though they are more resistant to diseases. Rearing local chicken is a good business option for those that don’t have good startup capital. These are more resistant to pests, diseases, weather and can do well on a free-range system.

All these breeds of chicken are good though you should consider your strategy and available capital before choosing which one to take on.

Factors to consider when choosing a breed to deal in.

Target market.

Your target market demands determine what poultry you should rear. The target market that needs meat requires raising broilers and kuroilers. If you are targeting a market that is interested in eggs, then layers are your choice.

Available revenue.

Revenue is another factor you need to consider before choosing the breed. Layers require a lot of capital to raise while kuroilers and broilers require less.

If you are just about money, then you can look out for what matches your revenue.

Available rearing space and location.

Generally, Kuroilers require a lot of space as they can also be released in the free range for exercise. Layers don’t like noise, usually on noisy days, and in noisy environments, they don’t lay. Meanwhile, broilers require less space and need to be in places with a ready market. Your location can dictate what breed you can take on.

Read also: How to start a car washing business.

Raise capital.

Next on the start-up process is raising capital. At this stage, You have a clear poultry farm plan and you know what it will take to come up with a decent farm.

What does it cost to start a poultry farm?

The cost to start a poultry farm varies from one breed to another due to the raising period, feeding, methods of raising, and more of the sort.

Layers require a lot of capital and carry the benefits of large-scale production. A decent layers poultry farm can take up to 15 million Uganda shillings.

Kuroilers don’t require that much and can cost up to 5 million shillings to come up with a decent farm.

Broilers require the least start-up capital. The cost of raising broilers to 4 weeks of age and 1kg of weight is 7500 Uganda shillings. You can multiply to see how many you Money can raise. The assumption of this is that there is no fixed cost such as the mother structure.

Now that you have a clear estimate of the capital required, it’s time we devise means of raising capital for your poultry farm.

There are no alien ways to raise capital, it’s still through bank loans, savings, partnerships, and more of the sort.

We have a full blog post about How to raise capital for your side business . It’s can be of help.

Choose a poultry farm location.

Choosing a location for your poultry farm should be based on the breeds you’ve chosen as discussed above. That’s if you have multiple locations. If you have one location, then the variable is the breed.

Ideally, a good place for poultry farming should be;

There is a need for space to store manure, a slaughter place, and more of the sort.

• Accessible especially to customers.

In case you are around town, some customers especially retailers can come over to buy both chicken and their products.

• In a quiet place.

Noise causes stress for the birds, it causes layers to miss laying some days, it stresses broilers and slows the fattening process. Either way, a noisy place isn’t ideal for poultry farming.

Read also: How to start a beekeeping business in uganda.

Raise shelter for your Birds.

The shelter is necessary for any method of raising poultry be it free range. That’s the mother house.

Common methods of raising poultry.

Free-range system.

This is the traditional method of rearing chicken. The farmer allows the chicken to roam freely on the farm in search of food and provides water. Later shelter is provided for safety in the night. This method is not ideal as chicken is overworked looking for food, exposed to bad weather, diseases, and pests.

 Deep litter system.

This is a modern method of rearing chicken. They are kept indoors all the time. The structures are large and allow free movement of the chicken. Food and water are provided for the chicken in the structure. This is my favorite and it’s what I also use. It’s cost-effective and provides all that is required.

Battery system.

This is also a modern method of rearing chicken. Chicken is kept in its cages in this method, food and water are kept at the front of each cage. This method is commonly used for layers. The main shortcoming is the additional cost of purchasing cages. Cages are usually prefabricated and expensive.

The shelter you raise shall be based on the system you want to use.

Purchase Equipment and feeds.

Next will be a one-time equipment fee. The equipment you’ll buy include;

These are for providing feeds to birds. Feeders may not be used for day-old chicks as we shall see later. Use chick feeders of 0.5m lengths for every 20 chicks. Poultry should use small feeders at 1weeks age, medium at two weeks’ age, and large for 1month + old poultry.

These are for providing poultry with water. Drinkers that chicks can reach but not fall into are appropriate to avoid drowning. Provide one drinker for every 50 chicks.

Cages ( if you are using the battery cage system).

If you plan on starting the project on a large scale, then a vehicle is important to help you transport feeds, manure, and products.

You’ll also need a heating system. These can be artificial heat sources such as infrared bulbs, heat lamps, electric and gas hovers, a stove, hot water radiators, and clay pots( locally). If you want to look after local chicken, then this shouldn’t worry you as the mother hens do all the work though that shall be on a very small scale.

Depending on the type of heat source being used, allow 1,000 chicks per hover or 200 chicks per infrared bulb or clay pot. If the temperature is right, chicks are evenly distributed throughout the brooder area which is a sign of comfort. If the temperature is low, chicks tend to cluster under or around the heat source. If the temperature is high, chicks move away from the heat source towards the brooder walls.

Feeding is an important aspect of a poultry farm. 70% of the cost goes into feeding and the success of your project is based on how well you feed the birds.

On this note, you must purchase the feeds from genuine producers that I’ll recommend at a later stage.

Tips to reduce feeding costs.

As I’ve mentioned before, 70% cost of poultry is feeding. It’s therefore important to try and optimize feeding costs to maximize profits.

Here are the tips to reduce feeding costs:

• Buy quality feeds.

These get the work done perfectly and on time to save you further  expenses

• Stock feeds when the price is still low.

This specifically applies to maize.

These are waste absorbent materials that poultry lie and step onto during their stay in the brooding house. Good litter should;

• Have good waste absorbent capabilities
• Should be cheap and readily available.
• Shouldn’t be dusty as this may cause cough in the poultry.
• Wet litter should be immediately removed as it forms a conducive environment for coccidiosis.

The most ideal litter that I also use is rice husks as it meets all the above.

Read also: Top small startup side hustle ideas in uganda.

Hire staff.

Poultry farming especially (exotics) is a very sensitive business. For this reason, I advise you to hire experienced staff. Starting small to minimize losses if any is always a good option as it also helps you to test your business strategy. You’ll need;

• Manual laborers
• Accounting and managing staff( especially on a large scale)
• A part-time or full-time veterinary personnel ( based on your scale of operation)
• Driver ( of you are operating on a large scale)

If you are operating on a small scale, you don’t need all these. You can work on the poultry farm yourself or hire external experienced persons only for the start.

Purchase Chicks.

This is another important element of the poultry farm. Now that you have everything set, it’s the stage to bring in the baby chicks. You’ll have to purchase the chicks from any reputable company that provides chicks in your area. If you don’t have any in your area, then you’ll have to move to the capital and you’ll find many of these. This is on rare occasions. In case you plan to produce very large numbers >5000, incubating and hatching these chicks in your hatchery would be a better option.

Different sources of chicks in Uganda.

Ugachick poultry

Biyinzika poultry

Kukuchick poultry

Those are the common chick sources on the Ugandan market.

Note ; Chicks from different sources are of different genetic nature and exhibit different growth and disease resistance capabilities. Ensure to get chicks from genuine reputable sources, preferably the one I have mentioned above.

Caring for Poultry.

This is another important aspect of the poultry business. A good poultry breed that is not cared for the right way is worth nothing. If you don’t care for the poultry well, they’ll not grow and fatten fast, they’ll fall sick and die, they’ll not lay. Whichever targets you have will fail if you don’t care for the poultry well. This is how serious it is.

Feeding poultry.

Providing your chicks with high-quality feeds is very important as I mentioned earlier. Preferably from their respective sources. i.e. all the chick sources have feeds. It’s better to buy feeds where you bought the chicks.

Follow the bird feeding schedule that can be got from your respective source of the chicks that I mentioned before. This clarifies the type of feed i.e. starter, grower or finisher to be given to the birds at a given age.

In case you’ve developed your mix proportion for mixing feeds, ensure the feeds contain coccidiostat to help control coccidiosis and antioxidants for broiler starters.

Provide chicks with abundant clean drinking water in clean drinkers. Add vitamins to boost the bird’s health or boosters into the drinking water.

Health management.

Brooder house should be isolated with restricted access to people to help reduce disease outbreaks. A footbath with a disinfectant at the entrance is sufficient to control some poultry diseases. Ideally, having specific shoes or boots that everyone that enters the poultry house uses is better.

Windows to the brooder house should be covered with mesh to prevent wild birds from entering. Wild birds can cause disease outbreaks in poultry.

Litter should be changed immediately if wet. Further, it should also be changed at the appropriate time( when filled with dropping).

Feeders should be cleaned before adding more feeds to prevent birds from eating dirt. This can cause digestive disorders.

Vaccination.

Just like other animals, poultry is vaccinated to prevent diseases. It’s usually an oral vaccine administered with a drop in the eye.

A combined vaccine of Newcastle Disease (NCD) and Infectious Bronchitis should be done on the first and third week. Gumboro (IBD) should be administered in the second and the fourth week.

All second vaccination doses are booster doses. On vaccination days, chicks don’t receive water with any Groth booster apart from Anti-stress or glucose.

Birds are not vaccinated in case they are sick. If they are sick, the dosage is shifted to the next week.

These vaccines can be got from veterinary supply shops in any area.

Read also; Why you should consider agribusiness for business.

Caring for day-old chicks.

This is the first test in poultry farming. Perhaps the hardest. Caring for day-old chicks is demanding and you need extra care at this stage. I’ll break down this process into steps that you should closely follow for success.

Transportation of the chicks from the hatchery.

Before transportation, chicks should be examined and checked at the hatchery or office of the hatchery. They should be dry clean with bright eyes. They should further be active and alert and make noise.

They should be able to sit and stand when placed on their backs.

If the chicks meet these conditions, then they should be transported in an aerated vehicle to their required destination. Chicks should not be transported in vehicle boots.

Preparation of brooding house.

Before arrivals of chicks is the preparation of brooding house.

Clean and disinfect the brooding house and all equipment with a good disinfectant at least one week before the arrival of chicks. I recommend Naro cleanse as a disinfectant simply because,

• It’s not toxic to poultry and the farmer.
• It does the work effectively.
• It has a residual effect of 1 week.
• Its cost is also friendly.

Disinfection should be done at least two times.

Choose litter material that helps in temperature regulation of the poultry house and is easy to manage. Litter should not be dusty. Rice husks or coffee husks can do the work.

A good litter thickness of at least 1 inch should be spread on the brooder floor as a cushion for chicks.

The brooding house size can be reduced to floor spacing of 25 chicks per square meter for layers and 20 chicks per square meter for broilers to prevent overcrowding and the requirement of more heating equipment.

For the first week, it is good practice to put feeds on spread papers (cement bangs or newspaper) to help chicks easily find feeds. These should be changed as soon as they are messed with droppings.

Material for this purposed should not be polythene. They should easily absorb the droppings.

Six hours before the arrival of chicks on the farm, the artificial heat source should be turned on to preheat the brooder house.

Ensure the brooder is corner-free to avoid piling of chicks in corners which can lead to suffocation and death.

A drinker per 5O chicks should be provided for easy access. The drinker size should match the chicks size and drinkers should be put at a level to avoid chicks drowning in water.

Chicks should only be given water with an antistress agent or glucose for the first two hours then feeds there after.

Ensure to feed the chicks as recommended, and always provide them with clean sufficient water, and do not forget the vaccination days.

Propper management of chicks in the first four weeks is the most important part of poultry farming. Your success shall all depend on this so try to put in your best and do it well.

Market Your Business.

This is another important aspect of the poultry business. It’s wise to have a ready market before your chicken maturity especially kuroilers and broilers. The more days ready chicken spends on your farm, the more losses you are making as you continuously incur feeding costs.

Read also; Top roadside businesses in uganda.

How to market your business and make sales.                                                                                               

• Reach out to possible customers before your chicken gets ready.

Possible customers include;

• Hotels and restaurants
• Roadside roasters
• Retail sales
• Supermarkets and butchers.
• Transport the chicken or eggs to high-demand areas. (Look for the market in other localities)
• Use media to market the products especially if you are operating on a large scale.

Tips to make your venture successful and profitable.

Never compromise on the quality of feeds to cut costs. This shall delay the maturity of chicks and you find yourself incurring more feeding costs. It can also compromise the health of your poultry.

Biosecurity is very important. Keep a water bath at the entrance of your brooding house. Naro clense is a good disinfectant to use for this.

Have Ready market before the birds get ready. This can save you extra feeding costs.

Follow all the vaccination dates as indicated. Never vaccinate sick birds.

Always call veterinary personnel to visit your farm and check on the health of your birds.

Read more: The key elements to success for a new business.

Watch out for some of the signs of sick birds.

• Dosing birds
• Coughing birds
• Diahhorrea and droppings with bloodstains.

For more, you can contact your veterinarian.

Conclusion.

A lot has been discussed in this article. I hope you’ve picked something. Poultry is a good business that I also do myself. Whether you have little money or space, there is no excuse for failing to give poultry farming a try especially if you are unemployed. Give it a try today and you’ll share your success story. In case you need more information about poultry farming, we are ready and willing to help. Contact us. If you feel this article has helped you, feel free to comment or add something to it in the comment box below.

Please subscribe to our newsletter for more such ideas in your inbox .

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Related Posts:

• broiler farming
• kuroiler business
• layer farming
• Poultry business
• poultry farming

38 thoughts on “How to start a poultry business in Uganda (2022).”

Thanks very much for this post. I have a question, during vaccination, which eye do you put the vaccine in ?

Thank you for your comment and question Scovia. Any eye can work.

Thank u much helpful . Kindly if u can share ur contacts

amazing. its good that you took your time to read.

Great tip. Very helpful content!!

Thanks, Yemane.

Thanks alot am to start my farm next month.

Success in your farming endevours

Thank you so much it has given me a great Idea please I would like to have your contact

Feel free to check out the contacts page Brian.

I have really learnt alot from this article

Great that you’ve learned a lot. that’s what its meant to do. ‘teach’. am happy that am achieving my objective

So helpful, thanks marxwell .

welcome Benitah

thank you.its great.

Thanks for ur motivation and skills

Thank you for teaching me

You are welcome

Am interested in local chicks. I need some of the suppliers. I have been out of the country for sometime so I have lost contact

Contact us please

Thanks so much for the services, kindly send me a pdf

Welcome. feel free to contact us through the contact form https://thesidehustless.com/contact/

i do poultry too for broiler part, i was amazed with the topic. thank you so much coz i have learnt a lot.

It’s great that you’ve learnt

Thanks a lot for the great help you’ve shared. I request for your contact please. Thanks.

Great piece starting broiler next month.

The best of luck doing business

Great lesson learnt.thanks so much.

Welcome Joji

Thanx ive been puzled over to start

its good that you can now start

how much is needed to build a house for 5000chicks in Uganda

thanks for this article, a lot learned. one question- what heating options do I have if there’s no electricity in my farm?? can solar power those heating lamps?

it can, though you need a powerful solar system because those lamps consume a lot of power

Thanks for the information provided. Needs Contact and I want to start mine this mid-July

You can contact us through our contact page

Thank you for this information. I would like to inquire about starting with 100 layers in a rural area and how much it may cost me.

Please contact us through our contacts page

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