The ministry of Finance has pledged to capitalise Uganda Development Bank (UDB) with an additional Shs 55 billion in a bid to bolster access and affordable financing options for local businesses.
"The bank will also undertake the implementation aiming to accelerate productivity, import replacement, and export promotion. Additionally, the bank will advance its holistic sustainability agenda and deepen financial inclusion for SMEs, women, and youth," said minister Matia Kasaija during the release of the 2023 financial year results.
According to FY 2023/24 results, UDB continued to grow with total assets closing at Shs 1.67 trillion in 2023, up from Shs 1.52 trillion the previous year. Loans and advances stood at Shs 1.47 trillion, a growth of 20 per cent from Shs 1.22 trillion, underpinned by the Shs 610 billion in new loan disbursements realised during the reporting period.
The bank reinvested Shs 467 billion it collected as repayments from its borrowing customers and deployed Shs 97.3 billion received from the government as additional capital contributions, complemented by an additional Shs 120.5 billion in drawdowns from various lines of credit held with its funding partners.
In 2023, the bank posted a profit of Shs 49.8 billion from Shs 42.6 billion registered in 2022. This resulted from the sustained growth in the bank's balance sheet, matched by prudent investment in interest-earning assets while ensuring lean operations. In 2023, the bank approved funding of Shs 692 billion in new loans to over 200 enterprises in 63 districts nationwide.
"These projects, upon full implementation, are expected to create 18,558 new jobs and generate an output value of Shs 11.4 trillion, from which Shs 616 billion will be generated as tax revenue to the government and Shs 3.34 trillion in foreign exchange earnings," the bank's annual report reads in part.
UDB's net loans expanded to Shs 1.47 trillion in 2023, reflecting robust support for the private sector. The bank strengthened its commitment to providing affordable and patient capital, achieving significant milestones amidst economic challenges.
According to UDB managing director Patricia Ojangole, in 2023, the bank approved Shs 691.8 billion and disbursed Shs 610 billion, demonstrating a dedicated approach to supporting private business growth.
"UDB remains committed to fostering inclusive economic growth through strategic investments in sectors that drive sustainable development and job creation across Uganda. Our focus on key priority sectors underpins our mission to deliver high socio-economic value and support Uganda's long-term development goals," she said.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
"Prioritizing social inclusion in the bank's development agenda is fundamental in fostering a resilient, inclusive, and sustainable society where no one is left behind. To the bank, social inclusion symbolises diversity and social cohesion, unlocking the full potential of individuals and societal segments where everyone can fully participate, contribute, and thrive," Ojangole said.
