KAMPALA – Uganda Development Bank Ltd (UDB), the country’s national Development Finance Institution has registered 57% annual growth compared to the previous year.
This is contained in the just-released Quarter Three (Q3) of 2022 results which covered the months of July, August, and September highlighting a tremendous growth.
Known for facilitating economic recovery through tailored interventions that suit the country’s development needs, the bank has grown its investment portfolio (gross loans) by 15% to close at Sh1.18trillion.
Ms Patricia Ojangole, the Managing Director of UDB says during the quarter, the Bank approved funding amounting UGX333 billion and disbursed UGX237 billion.
“The funding was allocated to 72 projects across the country and operating within UDB’s priority sectors. In line with its strategy, the bulk (80%) of these approvals were towards projects engaged in primary agriculture (UGX83 billion); Agro-processing (UGX48 billion) and manufacturing (UGX180billion).”
“The investments approved in Q3 improved the Bank’s 2022 approvals (since January 2022), to UGX797 billion, registering a 66% increase versus the UGX479 billion approved in the same period last year. This funding will support 201 projects across the country,” she added.
The Bank continues to avail the much-needed liquidity of funds to boost the capacity and resilience of private enterprises. In Q3, UGX237 billion was released to various businesses, of which UGX167 billion (70%) was allocated to the Bank’s three priority sectors – with primary agriculture receiving UGX8.3 billion, Agro-processing UGX 64 billion, and manufacturing UGX95 billion, while other sectors/services (including infrastructure, tourism, and human capital development) accounted for 30% of the disbursements (UGX 70 billion in value).
The total disbursements for January to September amounted to UGX556 billion, more than doubling the UGX273 billion deployed during the same period in 2021.
SME Specialized intervention
Under its specialized intervention fund (dubbed the “UDB Special Programs”) that directly targets support to the Small and Medium Enterprises (SMEs), Youth, and Women-owned enterprises, the Bank approved funding amounting to UGX7.1 billion during Q3, bringing the total approvals in 2022 to UGX20.2 billion, to support 91 enterprises.
“The Bank will continue to focus on these segments to holistically address the issues that systemically challenge their access to credit, including but not limited to building enterprise capacity,” Ms Ojangole adds.
Social Economic Impact
The projects approved for funding are projected to generate various development outcomes, including 33,060 jobs. Upon full implementation, these projects are also expected to generate additional output value of UGX8.9 trillion, from which UGX365 billion in taxes will be paid to the Government.
Under its Business Accelerator for Successful Entrepreneurship (BASE) intervention, the Bank in Q3 implemented an Enterprise Development Program across the various regions of the country.
Conducted in partnership with government agencies including the Uganda Revenue Authority (URA), National Social Security Fund (NSSF), Uganda Registration Services Bureau (URSB), and Uganda National Bureau of Standards (UNBS), the training sessions aimed to support nascent SMEs on their journey to professionalize their operations, their formalization and building their capacity to be credit ready. The regional sessions targeting 1,130 SMEs, were conducted in Kampala, Mbarara, Fort Portal, Lira, Gulu, Arua, Masaka and Mbale districts.
At the end of the quarter, the Bank’s total assets amounted to UGX1.44 trillion, growing by 19% from UGX1.21 trillion at the start of the year. The growth in the assets and loan book is on account of sustained growth in funding over the recent past both from Government capitalization and draw down of lines of credit from bilateral and multilateral funders.
“The Bank remains a sustainable institution, generating adequate resources to sustain its operations and meet its financial obligations. During the quarter, the Bank received UGX26.65 billion from the Y2022/23 Government of Uganda budgetary allocation, increasing the capital receipts in 2022 to UGX86.1 billion,” Ms Ojangole said of the growing funding.