UDB approves UGX 0.9trillion in projects finance, 0.6 trillion disbursedUDB MD Patricia Ojangole (extreme right),tours Totco Agro processing facility in Lira district. Totco is one of the beneficiaries of the banks lending
Disbursements by patient lender Uganda Development Bank Ltd (UDBL), reached UGX589 billion over the past seventeen months as the bank approved close to UGX 1 trillion in project finance, to shore up businesses that were impacted by the disruptions occasioned by the Covid-19 pandemic. The disbursed funds constitute just under 64pc of the UGX926billion that was approved for projects during the period under review.
The numbers were revealed January 14, by UDB Managing Director Patricia Ojangole, during a tour of Totco Agro processing facility, one of the beneficiary borrowers in Lira district. Ojangole said the disbursements represented the largest single block of investment in the post-COVID recovery effort as the government through UDB moved to stimulate economic growth through support to value addition, local production and import substitution. She added that at the onset of the pandemic, the government implemented several interventions to support the resilience and a faster recovery of the economy.
As part of those measures, the government committed to capitalize UDB with UGX one trillion; out of which UGX585 billion was extended as additional funding to the bank. Of the UGX585 billion, UGX455 billion was to be deployed to support the economy to be self-sustaining during the pandemic through lending to primary agriculture, agroindustry and manufacturing. The bank is seeing indicators that the economy is responding well to the stimulus despite the challenges imposed by the pandemic.
“The number of agriculture and manufacturing projects that use agricultural produce as an input has tremendously increased in the past years, which is an indicator that UDB financing is connecting the farmer and processor to a final consumer of quality Ugandan made goods,” Ojangole said during a press conference in Lira City.
Total loans approved between August 2020 and December 2021 for the three target sectors alone were worth UGX695billion of which UGX459 billion has so far been disbursed with disbursements continuing for the remainder of the undisbursed funds in line with the project implementation milestones agreed with the borrowers.
“Local manufacturers embraced the government’s call for import substitution and started or scaled up the production of essential and imported products like masks, sanitizer, plastics, textiles and paper products among others. Uganda not only became self-sufficient but also exports some of these manufactured products to the region and the world,” Ojangole said
Human capital development (health and education services), infrastructure and tourism, accounted for 22pc equivalent to UGX130 billion of the bank’s total disbursements.