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UDB’s total assets hit Shs 1.6trn in 2023-report

KAMPALA, March 1, 2024 – The Uganda Development Bank [ UDB ] has released unaudited report for 2023, showing the Bank’s total assets grew by 8 percent to Shs 1.64 trillion from Shs 1.52 trn accumulated in the year 2022.

According to the report, the growth in the Bank’s total assets was driven by the increase in gross loans to customers, which went up by 24 percent to close the period at Shs1.6trn. The bulk of the loans [ 59 percent] went to agro-industrialisation and manufacturing, with Shs 409 billion approved for this sector alone, Shs 19bln was approved for primary agriculture activities while Shs 223 billion was approved for the infrastructure sector.

The report shows actual funds disbursed amounted to Shs 610bln for various projects across the country. Industry took the lion’s share, accounting for Shs 391bln and representing 65 percent of the total disbursements, while primary agriculture accounted for Shs 38.5bln, representing six percent. “The balance was disbursed to finance other sectors, including infrastructure and services, including health, education, and tourism, says the report.

“UDB has continued to make significant strides towards facilitating Uganda’s socio-economic development. On this front, 18,558 jobs are expected to be created through the approved projects, in addition to generating Shs 11.39trn in additional output value, Shs615.96 billion in tax revenue for the government, and Shs 3.3trn in foreign revenue earnings.”

During the reporting period, the bank approved Shs22 billion to support 118 enterprises run by SMEs, women and the youth and disbursed an additional Shs 17 billion to this segment.

The reports says UDB invested another Shs 9.9bln in private equity, with an additional Shs 25.3bln approved in innovative startups with high impact in sub-sectors like vaccine manufacture, electric mobility, local paint manufacture, leather value addition, and eco-friendly building materials.

“The private equity and venture capital portfolio caters for the needs of SMEs or other entities, such as startups, that face challenges in accessing debt financing and require patient capital,” says the report.

Uganda ranks highly globally as having an entrepreneurial population. Albeit 70 percent of Ugandan enterprises never make it to their second year due to challenges of bookkeeping, governance, sustainability planning, access to markets, access to credit, and financial literacy.

“During 2023, we delivered a strong set of results, consistent with the performance trend over the last couple of years and in line with our role as the country’s Development Finance Institution. The Bank continues to make progress on its strategy implementation, fulfilling our primary mandate of generating tangible development outcomes that propel the country’s socio-economic progress. We remain resolute on carefully balancing these efforts with the need to be a financially sustainable institution,” said Patricia Ojangole, UDB Managing Director.

Ojangole further reported a slight uptick of 5 percent in borrowing and grants, reaching Shs245bln from Shs 232bln in December 2022. At least Shs 466.5bln was collected in loan repayments and reinvested to fund disbursements to various enterprises during the year.

“Through our Business Accelerator for Successful Entrepreneurship [BASE] programme, we extended business training to more than 500 enterprises across the country in 2023, of which 291 are to be incubated for funding in the year 2024. 61 percent of the enterprises trained were in the agriculture sector,” she said.

Adding to that, under the Bank’s Business Acceleration Programme, the Bank has supported 40 projects across the agricultural sector (mainly farmer groups), SMEs, youth, and men. The supported projects represent about 5,000 beneficiaries that have benefited from business advisory support, which has enabled them to catalyze and further grow their businesses.

The Bank has to date committed Shs 5.066bln towards the preparation of various projects and targeted funding initiatives,” Ojangole said. “As the country continues to recover from the devastating effects of Covid-19 and other constraints, there has been a surge in economic activity, culminating in a rising demand for long-term credit to catalyse investments in the country. The demand, as has been the trend recently, outstrips the resources available to the bank.”

The Bank’s funds inched up year-on-year by 12 percent, to Shs 1.38trn in 2023 from Shs1.23trn in 2022, boosted by capital injections from government and other funding partners during the period.

“We continue to explore all options to improve our funding base to reach more enterprises, thereby expanding our impact,” Ojangole said.

According to the report, in 2023, the Bank rolled out several new initiatives aimed at propelling and facilitating equitable growth and working towards achieving a market-driven economy. These included a special-purpose vehicle with a unique and specific focus on financing, unlocking, and catalyzing private sector investment in local green sectors that drive green impact and financial inclusion.

“The Bank also launched a digital solution that offers both a savings and lending option for small-holder farmers in Uganda and targeted financial and non-financial support to improve the competitiveness of emerging and existing Ugandan contractors,” the report says.

In a bid to expand its footprint across the country, UDB set up the first regional office in Gulu City during the reporting period to act as a liaison point for all the districts that constitute Northern Uganda.

“To further improve efficiency and deepen financial inclusion across the country, the Bank is establishing five regional offices. These offices will be strategically located in various districts of the country, which include Mbale for Eastern Uganda, Hoima for the mid-west region, Arua for West Nile, Mbarara for Western Uganda, as well as the Gulu office, which is already operational.”

UDB is the country’s national development finance institution with a mandate to accelerate socio-economic development in the country through sustainable financial interventions. The Bank supports projects within the private sector that demonstrate potential to deliver high socio-economic value, in terms of job creation, improved production output, tax contribution and foreign exchange generation, among other outcomes.

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