Fitch assigns UDB stable outlook
Ms Patricia Ojangole, the UDB managing director. FILE PHOTO
What you need to know:
- UDB becomes the second financial institution in Uganda to be rated by Fitch.
- The agency in June last year rated Stanbic assigning the bank with the AAA score.
Kampala. Government’s renewed commitment to capitalise Uganda Development Bank (UDB) coupled with a positive loan book has helped bank to improve its rating.
Fitch, a global rating agency, assigned the state-owned bank a strong rating of B+, indicating that the financial institution was now more credit worthy.
This means that the bank now holds a strong financial position with the capacity to repay its loans and on time.
A credit rating can be assigned to any entity that seeks to borrow money-an individual, corporation, state or provincial authority, or sovereign government.
Releasing the Fitch report last week, Ms Patricia Ojangole, the UDB managing director, said the bank’s position had been lifted by continued government’s annual capital contributions, which will go through up to 2022.
Government has made commitment to capitalise UDB with Shs500b and so far Shs274b has been sunk into the bank.
UBD gives long term finance to borrowers in priority sectors of the economy such as agro-processing, manufacturing and value addition, among others.
In Uganda, Ms Ojangole said UDB was providing long term financing for agricultural sector for value chain production, manufacturing, tourism, human development capital in education and health sectors, and infrastructure development and the borrowers are paying back the loans they have borrowed.
In 2018, UDB was rated the best performing Development Finance Institution in Africa by the
Mr Moses Ebitu, the UDB head of risk, said the rating was a result of good governance that has for long focused on confidence building.
“In many ways, it lowers the cost of borrowing [because] it leverages funding from multilateral institutions,” he said.
