Uganda - Uganda Development Bank Limited

The proposed intervention consists in providind to the Uganda Development Bank Limited (UDBL): (i) a Government Guaranteed Line of Credit for onlending to projects in various sectors in Uganda and (ii) a Line of Credit under the SME program to finance SMEs and benefit from a Technical Assistance (TA) of up to USD 1 million which will include components to develop UDBL’s credit risk management capabilities and processes /improve loan quality, corporate governance as well as capacitating the development outcome tracking capabilities of the institution. UDBL is a Development Financial Institution (DFI), which is wholly owned by the Government of Uganda and has been in existence since 1972. Its mandate is to intervene in SMEs and priority sectors in line with the Government’s (GoU) development aspirations. The proposed package provides the Bank an opportunity to play a signalling role for other investors. The provision of USD 20 Million LOC to be made available as a senior loan, along with a Technical Assistance facility will enable UDBL fully play its role as a national development financial institution in charge of implementing the country’s national development strategy and vision of being a middle-income country by 2040. Target sectors are enablers of economic growth such as agriculture, light manufacturing, tourism health and education. On-lending under the proposed sovereign-guaranteed LOC is expected to benefit infrastructure projects and SMEs operating in a variety of sectors, such as agriculture, light manufacturing, health, tourism and education mainly with the objective of alleviating poverty in line with the country’s National Development Plan (NDP.2).