First of all tell us about Uganda Development Bank (UDB) and its mandate
UDB is a wholly government-owned Development Finance Institution (DFI) mandated to finance enterprises in key growth sectors of the economy. We are a key partner to the Government of Uganda in delivering its National Development Plan (NDP) and to deliver this aspiration, we focus on the key growth sectors of the economy by financing development projects.
In line with our mandate and objectives, the Bank has aligned its operations with the National Development Plan (NDP III) 2021-2025 in defining priority sectors of the economy with significant socio-economic impact. These sectors include Primary Agriculture and Agro-Industrialization, Manufacturing, Tourism and Hospitality, Human Capital Development (Vocational and Training; Voluntary and Technical Education), and Infrastructure. However, there are specific interventions that are supported by the Bank under each of the sectors. Reference should thus be made to the Bank’s sectors of intervention catalogue.
What products and services do you offer?
The Bank’s offering includes both financial and non-financial products and services for Small and Medium Enterprises (SMEs) and large-scale development projects in the key priority sectors. The Financial services include short, medium and long-term financing, Asset Finance, Equity investment as well as working capital and trade finance. We also have a farmer group lending model which is value-chain financing to farmer groups registered as cooperatives or companies or farmer group associations.
The non-financial services include Project Preparation and Business Advisory Services.
You mentioned earlier that UDB is a Development Finance Institution (DFI). How do these differ from Commercial Banks?
Commercial Banks are private entities largely, with objectives of profit maximisation. DFIs such as UDBL are government-owned and are of the policy organs of the Governments with a socio-economic mandate, but they too must be financially sustainable. The bottom line of a purely commercial bank will be profits, but the bottom-line of a DFI will be economic impact and outcomes such as jobs, the value of exports, import savings, taxes generated for example, in addition to profits.
You have just run a Call for Applications for projects in Production, Import Replacement and Export Promotion. Tell us about that.
UDBL is a key player in the economic growth agenda of the Government. Its role following the outbreak of the Covid-19 pandemic is to implement part of the Government’s stimulus package that was designed to support fast economic recovery from the impact of Covid-19.
Hon. Matia Kasaija and Hon. Evelyn Anite, UDB Shareholders and Mr. Felix Okoboi UDB Board Chairman at a recent Annual General Meeting at the Ministry of Finance. Government of Uganda UDBL’s shareholder has provided funding to be used for priority affordable lending to selected strategic sectors under the bank’s production, import replacement, and export promotion program.
A production, import replacement, and export promotion program is critical for economic recovery and for transforming the economy to a modern economy that can sustainably generate sufficient industrial outputs that satisfy domestic, regional, and foreign markets; and rapidly increase household incomes to improve the living standards of Ugandans.
Our objective is to promote industries that are engaged in the manufacture of essential items in the economy. We are therefore seeking applications from priority industries engaged in agriculture, agro-processing, and manufacturing to which we’ll lend at an interest rate not exceeding 12%. These include food & beverages, textiles, clothing, leather & footwear (hides & skin), paper and publishing, packaging and wrapping materials, chemical & industrial products, timber, woodworks & furniture manufacturing, construction materials, pharmaceutical products, human & animal drugs manufacture and electricals.
It is important to note, however, that other industries will be considered based on their potential contribution to import replacement and export promotion.
How does one qualify for these funds?
Eligibility for financial and non-financial solutions from UDB requires that the applicant is a Ugandan entity preferably an existing business, or a start-up with high development impact and sustainability potential, in a priority sector requiring equity, project finance, asset finance, trade and working capital support or business advisory and project preparation solutions. Such projects should demonstrate the ability to generate tax revenue, create employment, or align with strategic development areas as prioritised by the Government of Uganda.
To maximise development impact, UDB currently finances projects with a minimum requirement of UGX100 million. However, we are leveraging on our strategic partnerships through Government-Owned Financial Institutions like Post Bank Uganda Limited to cater for the delivery of affordable targeted interventions below this threshold throughout the country.
What process does one have to go through to access these funds?
Applicants should complete the online form that can be found on our website www.udbl.co.ug and provide the supporting documents outlined in the criteria. The completed applications can either be submitted online or delivered at the UDB Head Office which is located at Plot 6 Nakasero Road, Rwenzori Towers Wing B. They can also be submitted at Post Bank Uganda limited branches across the country. Post Bank is our partner Financial Institution in this intervention.
A stone quarry, belonging to Abubaker Technical Services on of the beneficiaries of UDB financing in 2018. UDB is a wholly government-owned Development Finance Institution (DFI) mandated to finance enterprises in key growth sectors of the economy. In 2019 alone, projects financed by the bank created 4,343 new jobs and maintained 23,970 jobs in 2019; of these, 36% were held by women and 67% by the youth. Total contribution to government tax revenue by the various companies supported by the Bank improved by 6% during 2019, from UGX133.1 billion in 2018 to UGX141.7 billion.
Once we receive the applications, UDB shall communicate to each applicant on the required next steps.
What is your final message that you would like to share with the public?
We want the public to know that UDB is here for you. We understand that these are challenging and uncertain times but we are with you for the long haul. We are here to serve you.
Source: UDBL