DFCU III

completed

The project is to provide a multipurpose term loan to DFCU Ltd. (DFCU or the company) of up to $10 million (Note) with a maturity of up to 10 years including 3 years grace. A part of the project may involve partial guarantee of DFCU’s local currency term borrowing from pension funds (or insurance companies) based in the East Africa region. The company is a former portfolio client of IFC’s and is the forth largest banking group in Uganda. Established as a development finance company, DFCU has evolved into a multi-faced banking group and remains as the only specialized term lending institution in the country servicing mostly small and medium sized enterprises. The objective of the project is three fold: - support DFCU’s traditional line of business including term finance and leasing; - enable the company to develop the mortgage portfolio of its own thereby assisting the growth of Uganda’s mortgage market; and - foster competition in the local market, reducing costs for private sector in Uganda. (Note) Given DFCU’s interest in participating in IFC’s Global Trade Finance Facility, an incremental trade line would be made available to the company.