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UDB-approved loans to create 18,500 jobs

Patricia Ojangole

Patricia Ojangole

Uganda Development Bank (UDB) total outstanding loan portfolio to Ugandan enterprises rose by 24 per cent to Shs 1.6 trillion in 2023. 

The total loan disbursements in the year increased by 21 per cent. Over the same period, some Shs 691 billion was approved for lending to various projects totalling 201, according to the bank's unaudited performance statement for the year 2023.

Of the total approved applications, actual funds disbursed amounted to Shs 610  billion to various projects across the country. On the collection of debt, the bank recovered at least Shs 466.5 billion in loan repayments, which it reinvested to fund disbursements to various enterprises during the year. 

Of the total funding, industry, which comprises agro-industry and manufacturing accounted for 59 per cent or Shs 409 billion, which the bank says shows that it is on course to achieve its strategy to support key sectors. Primary agriculture activities were allocated Shs 19 billion while Shs 223 billion was approved to boost the infrastructure sector.

The approved projects are expected to create some 18,558 jobs while generating Shs 11.39 trillion in additional output value. They are also expected to lead to Shs  615.96 billion in tax revenue to the government and Shs 3.3 trillion in foreign revenue earnings. 

To enhance development in the underserved segments of the country including the SMEs, youth and women, the bank continues to effectively implement several strategies dubbed special programs, specifically tailor-made to support their development. 

During the reporting period, the bank approved Shs 22 billion to support 118 enterprises in the SMEs, women and youth category, and a total of Shs 17 billion was disbursed. Through its first private equity and venture capital deployed in December 2022, UDB invested another Shs 9.9 billion and approved an additional Shs 25.3 billion for innovative startups with high impact in sub-sectors.

These included vaccine manufacture, electric mobility, local paint manufacture, leather value addition, and eco-friendly building materials. The bank continued with efforts to ensure that more small and medium enterprises survive into their second year up from the current percentage of 30.

Some of the challenges named include bookkeeping, governance, sustainability planning, access to markets, access to credit, and financial literacy.

“Through our Business Accelerator for Successful Entrepreneurship (BASE) program, we extended business training to more than 500 enterprises across the country in 2023 of which 291 are to be incubated for funding in the year 2024. 61 per cent of the enterprises trained were in the agriculture sector,” managing director Patricia Ojangole said in a statement. 

Under the Business Acceleration Program, the bank says it has supported 40 projects across the agricultural sector (mainly farmer groups) SMEs, youth, and women. The supported projects represent about 5,000 that have benefited from business advisory support, which has enabled them to catalyse and further grow their businesses.

"The bank has to-date committed Shs 5.066 billion towards the preparation of various projects and targeted funding initiatives," Ojangole explained.

On access to finance by small enterprises, the bank, through a partnership with Ensibuuko, a local fintech, was able to digitize more than 112 farmer groups. These represent, more than 700 farmer-beneficiaries, who, the bank says, have been able to access digital microloans ranging from half a million to Shs 3.5 million, with Shs 500 million disbursed to farmers in this segment.

The bank committed Shs 50 billion towards the capitalization of the Climate Finance Facility. This is a special-purpose vehicle with a unique and specific focus on financing, unlocking, and catalyzing private sector investment in local green sectors that drive green impact and financial inclusion. 

"The beneficiaries also have access to the bank’s green advisory as well as the project preparation support "to make them bankable but more importantly grow them to become viable green businesses," said Ojangole.

In a bid to expand its footprint across the country, UDB set up the first regional office in Gulu city in 2023, to act as a liaison point for all the districts that constitute northern Uganda. This will be followed by regional offices in Mbale for eastern Uganda, Hoima for the mid-west region, Arua for West Nile and Mbarara for western Uganda.

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