Peirre Guislain, the Africa Development Bank (AfDB) vice president, private sector infrastructure and industrialization, has called for improved capitalisation of the Uganda Development Bank upon learning of government’s input.
The AfDB chief said this last week after meeting several stakeholders in the banking sector, including ministry of Finance officials as well as the private sector players.
UDB is state-owned and was incorporated in 1972. In 2000, however, it became a limited liability company. In the financial year 2017/2018, the bank was allocated Shs 50bn, which, according to Guislan, is not enough and thus the need for capitalisation.
“There is clearly significant need and demand for lending here and that came out very clearly in my meetings with the private sector. There is significant need for local currency funds and there is a bit of a gap in the market; so, that is something all of us need to look out for and see how we can address it,” he said. “We also need to look into the availability of local currency funds at competitive rates.”
He says AfDB are considering capitalising UDB through its affiliate, the East African Development Bank (EADB). “As you may know, the EADB is the regional development financial institution and we, as a shareholder in EADB, have a close relationship and I want to meet the management team and discuss a partnership and see how we can strengthen that even further,” he added.
He further pointed out that AfDB will continue to provide development finance lending and related services in the East African region.
“We will also offer loans to medium and large-scale enterprises in various sectors, including manufacturing, agro-processing, tourism and construction as well as start-ups in Uganda,” he said.