Uganda Development Bank boasts loan uptake surge and job creation

The surge signals an increased appetite for long-term loans in the public. The value of new loan applications approved for funding was Shs894 billion after a 40 percent growth in 2022.

The manufacturing and agro-industry sector got the biggest number of approvals amounting to Shs454.75 billion while primary agriculture got approvals worth Shs96.75 billion.

In the period under review, disbursed funds almost doubled from Shs428 billion in 2021 to Shs776.6 billion in 2022 at 81 percent growth. Agriculture, manufacturing, and agro-processing accounted for 76 percent of the total sum disbursed.

During a visit to one of the projects, Bwendero Dairy Farm in Hoima City on February 10, 2023, Allan Joshua Mwesigwa, the director of strategy and corporate affairs at UDB said that the financial results from 2022 reflect strong investment in the economy and livelihoods for recovery.

He noted that the performance boosts their confidence that they are on track to achieve their objectives.

“This performance is anchored on the bank’s deliberate efforts towards the revitalisation and transformation of Uganda’s economy,” he said.

Mwesigwa said the lender’s product portfolio is aimed at boosting key sectors to align with the country's National Development Plan III.

Performance

In 2022, UDB launched a special program’s intervention with a focus on driving small and medium-sized firms (SMEs), as well as women and youth-run businesses.

Through implementation, the bank was able to approve Shs31.5 billion for 128 enterprises, 42 of which were women-owned.

In the same period, the lender launched the Business Accelerator for Successful Entrepreneurship (BASE) with the aim of preparing entrepreneurs for financial growth through improved business practices.

Altogether, eight regional training sessions were conducted in Kampala, Fort Portal, Mbarara, Lira, Gulu, Arua, Masaka, and Mbale districts covering 1,130 SMEs. Through this program, Shs147.3 billion in funding prospects were identified.

This year, at least 274 enterprises are expected to participate in the inaugural UDB Business Incubation Program to prepare participants for credit and identify prospective clients for the lender.

Employment opportunities

The approved projects for the year are expected to generate 35,372 new direct jobs and output value worth Shs9.35 trillion. Jointly, these prospects are expected to generate Shs393.79 billion in tax revenue and attract foreign exchange income worth Shs1.58 trillion.

According to the proprietor of Bwendero Dairy Farm, John Magara, they are already benefiting from the newly installed sugar plant in Kitoba village, Hoima District.

Production has since grown to 580 tonnes daily in 2022, a 77.3 percent growth from 38.6 percent in 2021.

“The farm has been able to diversify its operations to sugar processing, distillery, and milling, hence producing brown sugar, maize flour, and pharmaceutical ethanol, among others,” Magara said.

UDB's assets grew by 19% from Shs1.21 trillion to Shs1.44 trillion from increased funding through capital allocations from the government and credit from the bank's funding partners.