Kampala- The government has approved a request by Uganda Development Bank (UDB) to increase the institution’s financial capital from the current Shs100 billion to Shs500 billion.
This was revealed at a function hosted by the bank in Kampala last week.
The money will allow the bank to offer loans for major infrastructural developments in key growth sectors of manufacturing, agriculture, extractive industry, and tourism, among others.
According to UDB chief executive officer Patricia Ojangole, these sectors are deemed to have a multiplier effect for both wealth and job-creation.
“To us making an impact say in the agriculture sector, which majority Ugandans depend on, it means impacting the economy positively,” Ms Ojangole said, adding that the cited sectors take up to 50 per cent of the money loaned out.
Currently, UDB’s interest rate stands at 12.5 per cent for long term financing, 13 per cent medium-term and 14 per cent for short-term loans which is cheaper compared to between 18 to 23 per cent charged by commercial banks.
She also said the bank’s non-performing loans have reduced over time from 60 per cent to nearly 24 per cent. This is attributed to reforms the bank is undertaking, including restructuring.
Board chairperson Samuel Sejjaka said the bank has developed a 2013 to 2017 strategic plan to enable the bank make profits to avoid a planned move by government to privatise it.
He said UDB’s total assets are projected to grow at an average annual rate of 36 per cent translating into Shs198 billion in 2013 to Shs1.2 trillion by 2017.