Uganda Development Bank (UDB)has obtained a UGX 20 billion loan from the Export –Import Bank of India to lend to Agri-based Small and Medium Sized enterprises(SMEs).
The move is in line with the banks objective of diversifying its funding base, through seeking funding partners to compliment the capitalization from the government.
Patricia Ojangole, the Managing Director,says of the 500bn, capitalization from government as promised in the 2018/19 budget,only about 50% has been obtained.
Meantime the bank is mandated to finance key growth sectors of the economy and over the next 5 years, they are slated to devote financial resources towards supporting sectors of Agriculture and Agro Industrialization, manufacturing, tourism, Human Capital Development and Infrastructure, minerals,oil and gas.
It is in line with these goals that they have been in taklks with the export-import bank of India leading up to the now approved,7-year line of credit worth USD 5Million-(Approximately 20bn)to finance the importation of goods and services from the Republic of India.
While responding to queries on why the funding is skewed towards imports yet the country needs to export more, the Managing Director, noted that some raw materials can only be imported.
‘the funding will further increase capacity of UDB to facilitate production and to support the SME’s, specifically those that require various goods from India’ Ojangole said.
Deepak Kajur,the regional representative export-import Bank of India, noted that the bank, wholly owned by the India government was committed to facilitating international trade and the fund is a climax of the Uganda-India trade relationship dating decades ago, amid optimism of many more partnerships to come recently highlighted by Narendra Modi, the Prime Minister’s Visit.
In line with service to Ugandans,UDB has approved over UGX 220bn out of the UGX 300bn worth of credit requests and looking forward to disbursing UGX 100Bn in the next 24 months,according to senior management. In addition,they pride in offering cheaper and attractive credit, averaging at 14% plus being more engaging with clientele at a time when many people are shunning credit offered by commercial banks, whose interest rates average at 24%.