Cash Is King: SBG’s Semakula urges SMEs to turn liquidity into leverage

October 10, 2025 in Business, Companies, Finance, Financial Services, Investment by Editor

Small and Medium Enterprise (SME) owners have been urged to maintain strong cash buffers and diversify their investments to build resilience against economic shocks.

The advice came from Grace Semakula, Chief Executive of SBG Securities, while addressing participants during the October Masterclass organised by Stanbic Business Incubator Limited (SBIL) under the theme “Benefits of Investing in Unit Trusts for SMEs and Individual Investors.”

SBG Securities and SBIL are both subsidiaries of Stanbic Uganda Holdings Limited (SUHL). While SBG focuses on brokerage and investment advisory services, SBIL supports SMEs through capacity building, market access, and financial literacy programmes.

Semakula urged entrepreneurs to view cash not as idle capital but as a strategic growth enabler. “Cash should be treated as a strategic enabler for growth, not left idle — idle money loses value,” he said. Citing lessons from the COVID-19 pandemic, he noted that businesses with adequate liquidity were better positioned to withstand the lockdown’s impact.

“Crises create unique opportunities,” Semakula explained. “Take the example of Apple during the 2008 global financial crisis. It had over $25 billion in cash reserves and no long-term debt — a position that gave it flexibility to innovate and expand while others struggled.”

He added that internal cash flow remains the cheapest and most flexible form of financing, advising SMEs to build buffers in good times and minimise reliance on debt.

On diversification, Semakula highlighted the Stanbic Unit Trust, launched in June 2024, as an accessible investment vehicle that allows SMEs to manage risk while pursuing growth. “Entrepreneurs face significant risks, but diversification can reduce these and support long-term expansion,” he said.

Catherine Poran, Chief Executive of SBIL, echoed the message, encouraging businesses to leverage financial innovation and diversification to scale sustainably. “By exploring new investment avenues and broadening their financial strategies, SMEs can better manage risks and position themselves for growth in an increasingly competitive market,” she said.