Top Finance Company, a Chinese-based firm, is offering to help with short term loans for Ugandan importers trading with China.
According to Top Financing Company Chief Executive Officer, Jeffrey Phng their partial financing product is aimed at solving cash flow problems Ugandan importers face when many commercial banks turn them down.
"Under our arrangement Uganda's exporters and importers will be financed by our company. What they need to have is the small percentage of the total cost of their merchandise (containers) then the bigger percentage will be financed by Top Finance at small interest rates as compared to the ones charged by the commercial banks in Uganda," he said. Top Finance is targeting business people who are trading with China. "This enables us to know and advise you on the number of containers to order for depending on your current cash flow.
With this knowledge beforehand, we are able partially to finance your consignment on time so that you get the Bill of Lading early enough in order not to incur storage and demurrage costs at the port of Mombasa" he said.
According to company officials, under their arrangement, when the goods enter Uganda, Top Finance stores them in their warehouse in Kampala.
Then the goods are released by installments to the client( the importer) until he clears all the loan amount.
Paul Nyakaana, the Top Finance loan officer said the reason why they release the goods in installments is to allow business people sell part of the consignment then pay back the loan in stages.
He said in this way, their clients will not be as stressed like when dealing with the commercial banks.
Bob Alex Ewange the President of Rocks Group of Companies, one of the first beneficiaries, told the East African Business Week, the product is good and saves time for the business person especially those dealing in imports and exports.
"The time you spend with commercial banks to process a loan is quite long and this affects the volume of transactions which could have been realized by the importer.
But with Top Finance, the moment you provide them with information concerning your business and the supplier, it will take two days to get the finance facility which is not the case with commercial banks," he said.
He said with this kind of financing it reduces the cost an importer may incurs at the port of Mombasa in form of paying for storage and demurrages which comes as result of the importer s failing to clear his or her goods.
