Africa Business Communities

Ugandan government recapitalizes Uganda Development Bank to offer long term lending

The government of Uganda has announced plans to fund Uganda Development Bank to a tune of $14.5 million every month to boost the bank’s capacity to provide long term financing.

The bank has already approved loans said worth $7 million but they does not have money to disburse to these borrowers because the bank was awaiting funds from the ministry according to Mr Samuel Sejjaaka, the UDB board chairman

“Ministry of Finance will be disbursing Shs50 billion to UDB every month starting October. Within the next five years, we should have received capitalisation of up to $145 million,” Mr Sejjaaka said.
He said as a bank, their concern is to fast track the acquisition and provision of low cost financing to the customers. “We already have a pipeline of people who want this money. We are waiting for the ministry of Finance to disburse the first Shs50 billion,” he said.

The decision follows a meeting between the UDB board and President Museveni during which the President proposed to provide the bank with $200 million funding. We agreed that the ministry of Finance will provide $200million this year.”

Mr David Bahati, the minister of state for Finance said the ministry had budgeted for $14.5 million for the bank this financial year. He said as government they were going to finance UDB to the tune of $145 million. “Beginning with this financial year, we are putting in $14.5 million and we hope to reach $145 million in the next five years,” he said

Mr Bahati said the government was working on strengthening the bank’s ability to fund infrastructural projects in the country and also promote local content.


Ms Patricia Ojangole, the chief executive officer UDB, said the bank has been registering positive performance. “We have registered growth of up to 30 per cent in one year.

Last year government approved a request by UDB to increase the institution’s financial capital from $29 million to $145 million.

 www.udbl.co.ug

 

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