Uganda Development Bank to shift its market interest
Posted Tuesday, July 9 2013 at 00:00
UDB wants to reposition itself and have an impact on Uganda’s large business projects.
Despite its core mandate of providing development finance to projects in the country, Uganda Development Bank’s (UDB) presence in the market has been felt much by people in need of cheap credit.
This has been partly due to the alleged financial mismanagement and fraud that has seen the bank post massive financial losses over the years, resulting into an increase in bad loans.
The government-owned development bank’s level of non-performing loans rose to Shs7.9 billion last year, up from Shs2.1 billion in 2011, according to the institution’s 2012 annual report.
However, in a bid to reposition itself and to deliver on its mandate of providing development finance to viable projects for economic development, the bank’s chief executive officer, Ms Patricia Adongo Ojangole told Prosper that a five year strategic plan (2013-2017) had been developed to among other things increase the institution’s brand visibility and also enable it raise funds to fund projects.
“The bank doesn’t have much presence in the market currently and we are planning to rebrand in the third quarter of this year to increase the visibility of the brand and provide more development finance,” Ms Adongo said.
To that effect, the bank’s share capital was increased by shareholders at the recent annual meeting from Shs100 billion to Shs500 billion, to enable it grow its balance sheet so as to be able to carry out its mandate and play a more active role in the development of the country.
Mr Daniel Kaggwa, the bank’s director finance, said to further boost the balance sheet, the institution had engaged development partners including the Kuwait Fund, the trade finance bank for Africa - Afrexim Bank, Arab Bank for Economic Development in Africa – Badea and the Islamic Development Bank (IDB) to provide lines of credit but also hope to bring more partners on board.
With that, he said, the bank will be able to leverage its balance sheets of other strategic development partners to fund local projects.
He, however, added that the challenge with such strategic partnership is that the institution would only able to access as much depending on its capital base.
The bank currently finances agriculture and agro-processing projects, trade and commerce – especially supporting exports and import substitution, and education, health and real estate and construction projects.