Uganda Development Bank(UDB) has released its quarter three results highlighting a solid growth as the bank continues to facilitate economic recovery through tailored interventions that suit the country’s development needs.
Through the quarter that covered the months of July, August, and September, UDB’s investment portfolio (gross loans) improved by 15% to close at Sh1.18trillion.
Compared to the previous year, the annual growth registered was in the highs of 57 per cent.
Growth
During the quarter, the bank approved funding amounting shs333 billion and disbursed shs237 billion.
“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%) of these approvals were towards projects engaged in primary agriculture (shs83 billion);agro-processing (shs48 billion) and manufacturing (shs180billion),” said Patricia Ojangole, the Managing Director of UDB .
“The investments approved in quarter two improved the bank’s 2022 approvals (since January 2022), to shs797 billion, registering a 66% increase versus the shs479 billion approved in the same period last year. This funding will support 201 projects across the country.”
According to the results, shs 237 billion was released to various businesses, of which shs167 billion (70%) was allocated to the bank’s three priority sectors including primary agriculture which received shs8.3 billion, agro-processing shs64 billion, and manufacturing shs95 billion, while other sectors and services including infrastructure, tourism, and human capital development accounted for 30% of the disbursements (shs70 billion in value).
The total disbursements for January to September amounted to shs556 billion, more than doubling the shs273 billion deployed during the same period in 2021.
Support to SMEs
According to the results, under its specialized intervention fund dubbed the “UDB Special Programs” that directly targets support to the Small and Medium Enterprises (SMEs), youth, and women-owned enterprises, the bank approved funding amounting to shs7.1 billion, 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,” Ojangole noted.
According to the bank, the projects approved for funding are projected to generate various development outcomes, including 33,060 jobs.
Manufacturing will lead the way with 16087 jobs, primary agriculture (7558),agro-processing(6105) and infrastructure at 1,724 jobs among other projects.
UBD estimates that upon full implementation, these projects are also expected to generate additional output value of shs8.9 trillion, from which shs365 billion in taxes will be paid to government.
Non-financial interventions
Under its Business Accelerator for Successful Entrepreneurship (BASE) intervention, UDB 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.
According to the report, the regional sessions targeting 1,130 SMEs, were conducted in Kampala, Mbarara, Fort Portal, Lira, Gulu, Arua, Masaka and Mbale districts.
Financial performance
In terms of financial performance, at the end of the quarter, the bank’s total assets amounted to shs1.44 trillion, growing by 19% from shs1.21 trillion at the start of the year.
The report indicates that 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 draw down 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 financial year 2022/2023 government budgetary allocation, increasing the capital receipts in 2022 to shs86.1 billion,” UDB Managing Director, Patricia Ojangole said of the growing funding.