The Uganda National Association of Building and Civil Engineering Contractors (UNABCEC), has signed a Memorandum of Understanding with NCBA Bank Uganda Limited and Libitco Technical Supplies Uganda in an effort to support the growth of the construction industry in the country.
UNABCEC is a member driven national trade association representing companies and organisations engaged in construction.
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The partnership was launched at UNABCEC 27th annual general meeting at Silver Springs Hotel Bugolobi.
According to the officials, the partnership will go a long way in easing the financial load on the contractors by offering them the opportunity to access bid bonds of up to Shs 500m to fund their projects.
In addition, a member who opens an account and qualifies for a credit facility will have the opportunity to request for an additional unsecured limit under the the bank reverse factoring/supplier financing product.
The limit and tenor for this product will be based on supplier spend and credit terms with the suppliers.
NCBA Bank Uganda recently launched the Shs 500 million unsecured bid bond offer to the public where customers would need to open up accounts and run them for three months in order to qualify for this service.
However, officials said for the UNABCEC members, new account holders will immediately have access to the unsecured bid bonds as per the MoU.
Speaking during the meeting, NCBA Bank Uganda executive director, Corporate Banking and Structured Solutions, Mark Muyobo, said he was excited by the partnership.
He said the partnership is aimed at bolstering the construction industry as a strategy to support the economy through infrastructural development.
"This strategic partnership with UNABCEC presents a strong value proposition to corporate and SME businesses who get contracts to run big projects and have constrained cash flows due to ever fluctuating economic situations in the business environment,"he said.
Julius Mugabo, the director Libitco Technical Supplies Uganda, said his expectations from the partnership is great.
Elizabeth Muhebwa, the executive director of UNABCEC said this was an important step in the association's vision to be the lead engine for growth and development of the construction industry in the region.
"We are delighted that a global financial institution such as NCBA Bank Uganda is stepping up to fill major gaps in the industry that constrain the growth of smaller contractors and impose barriers on their ability to tender for big work packages and thus improve capacity,"she said.