The country’s national Development Financial institution- Uganda Development Bank (UDB), has today released its Third Quarter (Q3) of 2022 results highlighting solid growth where over 33,060 jobs were created and growth of its investment portfolio that now stands at Sh1.18 trillion.
As the Bank continues to facilitate economic recovery through tailored interventions that suit the country’s development needs, more Small and Medium Enterprises (SMEs) have seen their way through thriving on the Shs7.1bn that the bank released for SMEs to recover.
Through the third quarter which covered the months of July, August, and September, the bank’s investment portfolio (gross loans) improved by 15 per cent to close at Sh1.18 trillion, compared to the previous year, where the annual growth registered was at the high of 57 per cent.
While speaking during the release of the results, Ms Patricia Ojangole, the Managing Director of UDB said the funding was allocated to 72 projects across the country and operating within UDB’s priority sectors.
In line with its strategy, the bulk (80 per cent) of these approvals were towards projects engaged in primary agriculture (Shs83 billion); Agro-processing (Shs48 billion) and manufacturing (Shs180billion).
“The investments approved in Q3 improved the Bank’s 2022 approvals (since January 2022), to Shs797 billion, registering a 66 per cent increase versus the Shs479 billion approved in the same period last year. This funding will support 201 projects across the country,” she said.
Ms Ojangole also affirmed that the Bank continues to avail the much-needed liquidity of funds to boost the capacity and resilience of private enterprises.
In Q3, Shs 237 billion was released to various businesses, of which Shs167 billion (70 per cent) was allocated to the Bank’s three priority sectors with primary agriculture receiving Shs8.3 billion, Agro-processing Shs64 billion, and manufacturing Shs 95 billion, while other sectors/services (including infrastructure, tourism, and human capital development) accounted for 30 per cent of the disbursements (Shs70 billion in value).
The total disbursements for January to September amounted to Shs556 billion, more than doubling the Shs 273 billion deployed during the same period in 2021.
According to the report; in the first quarter, Shs165bn was approved, Shs118.5bn was disbursed and the gross loan book increased to Shs908bn. In the second quarter, Shs289bn was approved, and Shs200.4bn was disbursed making a gross loan book of Shs1,026bn. In the third quarter, Shs333bn was approved, Shs237.4bn was disbursed and the gross loan book increased to Shs1,180bn.
In total, from January to September this year Shs797bn was approved, Shs556bn was disbursed and the gross loan book stands at Shs1,180bn.
Under its specialized intervention fund (dubbed the “UDB Special Programs”) that directly targets support to the SMEs, Youth, and Women-owned enterprises, the Bank approved funding amounting to Shs7.1 billion during Q3, bringing the total approvals in 2022 to Shs20.2 billion, to support 91 enterprises.
“The Bank will continue to focus on these segments to holistically address the issues that systemically challenge their access to credit, including but not limited to building enterprise capacity,” Ms Ojangole added.
She revealed that the projects approved for funding are projected to generate various development outcomes, including 33,060 jobs. Upon full implementation, these projects are also expected to generate an additional output value of Shs8.9 trillion, from which Shs365 billion in taxes will be paid to the Government.
In terms of Non-Financial Interventions, under its Business Accelerator for Successful Entrepreneurship (BASE) intervention, the Bank in the third quarter implemented an Enterprise Development Program across the various regions of the country. Conducted in partnership with government agencies including the Uganda Revenue Authority (URA), National Social Security Fund (NSSF), Uganda Registration Services Bureau (URSB), and Uganda National Bureau of Standards (UNBS), the training sessions aimed to support nascent SMEs on their journey to professionalize their operations, their formalization and building their capacity to be credit ready.
The regional sessions targeting 1,130 SMEs, were conducted in Kampala, Mbarara, Fort Portal, Lira, Gulu, Arua, Masaka and Mbale districts.
In terms of Financial Performance, at the end of the quarter, the Bank’s total assets amounted to Shs1.44 trillion, growing by 19 per cent from Shs1.21 trillion at the start of the year.
The growth in the assets and loan book is on account of sustained growth in funding over the recent past both from Government capitalization and the drawdown of lines of credit from bilateral and multilateral funders.
“The Bank remains a sustainable institution, generating adequate resources to sustain its operations and meet its financial obligations. During the quarter, the Bank received Shs26.65 billion from the Y2022/23 Government of Uganda budgetary allocation, increasing the capital receipts in 2022 to Shs 86.1 billion,” Ms Ojangole added.
According to Ms Ojangole, to match the ever-growing demand for long-term (patient) and affordable capital, a key ingredient for sustained economic growth, the Bank is deploying various mechanisms to diversify its funding base, and to complement the capital allocations from the Government of Uganda.
“The Bank remains committed to making a meaningful contribution to improving the quality of life of Ugandans.”
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