26/08/2026
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26-08-26
An economist has advised start-up small and medium enterprises (SMEs) to reduce their dependence on borrowing when establishing their businesses, saying excessive debt can hinder their growth.
In an interview with One Love Radio News, economist Noah Kabwita said many promising enterprises have failed to grow into viable businesses because entrepreneurs burden themselves with debt from the early stages of operation.
Mr Kabwita said although access to finance is important for business growth, entrepreneurs should consider alternative ways of raising capital, including bringing in investors who can inject funds into the business in exchange for a stake.
He, however, advised entrepreneurs to avoid excessive borrowing, particularly during the first years of operation, when businesses are still establishing themselves and generating stable revenue.
βIt is important that you understand how to structure your capital, in the inception, donβt go for debt, donβt go for financing, go for the first two, equity and investment.
βThe culture weβve had in this country from the inception of the free-market economy has been financing, financing, financing, and thatβs why many promising enterprises have failed,β Mr Kabwita said.
Mr Kabwita said entrepreneurs seeking investment must also have clear long-term business plans, as investors are generally more interested in businesses with sustainable growth prospects than those focused on short-term returns.
βInvestment is for a long term, if I come to join you, I want to grow with you in value and in the increase of the business and investment,β he said.
By; Fortune Sianezuna
