KAMPALA- Uganda Development Bank (UDB) has said the Shs1 trillion recapitalisation will mainly focus on businesses involved in primary agriculture, agro-industry and manufacturing.
Speaking in an interview, Mr Felix Okoboi, the UDB chairman, said the recapitalisation comes at a time when businesses need support to revitalise operations slowed down by Covid-19.
“2020 has been challenging [but] this money will help us [revitalise] businesses involved in primary agriculture, agro-industry and manufacturing,” he said.
However, Enterprise Uganda Executive Director Charles Ocici cautioned UDB to pay serious attention and scrutinise small and medium enterprises that will seek to tap into the Shs1 trillion kitty. Scrutinising prospective borrowers and educating them about the pre-conditions of accessing the money, he said, will be key in the recovery process for onward lending.
“Successful financing in the commercial sector of banking must ensure that resources circulate. If they go one way and they don’t come back, you have eroded the ability of the bank,” he said, noting that the money must only be lent out to entrepreneurs who have demonstrated capacity and ability to fully utilise it.
In his 2020/21 budget speech, Finance Minister Matia Kasaija allocated Shs1 trillion to UDB to enable SMEs affected by Covid-19 to access low cost credit.
Mr Ocici also urged National Agricultural Advisory Services and Operation Wealth Creation to use the Shs300b allocation in redemption of agribusiness.