• August 23, 2020
  • No Comment
  • 5 minutes read

Government Announces Financing Programs To Support COVID-19 Relief Under Uganda Development Bank

Government Announces Financing Programs To Support COVID-19 Relief Under Uganda Development Bank

As part of the strategy to ensure that the economy recovers from the COVID-19 pandemic, the President of Uganda allocated UGX 1.045 Billion to Uganda Development Bank (UDB) to offer low-interest financing to manufacturing, agribusiness, and other private sector firms to support the production of essential goods and goods for import substitution and export promotion. Uganda Development Bank is a government-owned institution with a mandate to finance enterprises in key growth sectors of the economy. Here is what you need to know about the financing program.

What products and services will UDB offer?

UDB offers financial and non-financial products and services, including asset financing, equity investment, short- and long-term financing, and farmer group lending models. Non-financial services include business advisory services and project preparation.

What are the key priority industries that will be considered for financing by UDB?

  • Food & beverages, textile clothing, hides and skins, paper printing, packaging and publishing & wrapping materials, timber, wood works& furniture manufacturing, construction material, pharmaceutical, human/animal drugs, and electrical
  • Medical equipment and products including machinery, ventilators, personal protective equipment/PPE
  • Production of essential goods and services including agricultural production

Other industries will be considered on a case by case basis.

What kinds of projects are eligible for financing by UDB?

UDB has aligned its operations with the National Development Plan, with specific interventions in key major sectors including agriculture, agro-Industrialization/agro-processing, and manufacturing aimed at the production of essential goods and services for export promotion. Funding will go towards acquisition of farm inputs, acquisition of farm mechanized equipment, improving farming methods, breeds, crop, livestock and harvest and post-harvest handling management. Agro-processing funding will cater to purchase of agro-processing equipment for value addition, construction of warehouses, plants and machinery, and working capital financing.

one of the businesses to be supported

What are the terms?

Financing will be offered with the following terms:

  • Loan minimum of UGX 100 million with the maximum dependent upon the bank’s limit
  • An interest rate of 12% per annum for borrowing in UGX
  • Loan term of up to 15 years
  • Grace period of up to 3 years

What are the criteria to qualify for financing?

To qualify, a business must operate within the sectors listed above, be registered in Uganda, and be owned by Ugandans. Exceptions may be considered for strategic projects that have a developmental impact on the economy. In addition, collateral and/or an equity contribution by the owner may be required, depending on the specific project and associated risk. Businesses can be either startups with a high potential for development impact or existing businesses seeking expansion. Owners must demonstrate the feasibility of the business and project for which financing is being requested. Businesses should also demonstrate social-economic and viability. Other criteria may apply.

All terms and required documents are available here: https://docs.google.com/forms/d/e/1FAIpQLScver8O_hfPNGrSCKGpFGzbv6np8WFUgfBEY7_apqUvzp3VuQ/viewform.Applications may be downloaded and submitted online, or hard copies may be obtained at UDB’s Head Office at Rwenzori Towers or any post bank branch near you. More documentation or follow-up questions may be asked of you as part of the appraisal process.

Related post

Judiciary Driver Interdicted After Complaining About Inadequate Pay

Judiciary Driver Interdicted After Complaining About Inadequate Pay

The Judiciary Permanent Secretary, Mr Pius Bigirimana has interdicted one Stanley Kisambira, the judiciary driver who recently complained about low salary…
Minister Nandutu Remanded to Luzira

Minister Nandutu Remanded to Luzira

The misuse of iron sheets intended for the residents of the Karamoja sub-region has led to the High Court committing the…
Travel Guide: Best Time to Visit Uganda

Travel Guide: Best Time to Visit Uganda

Welcome to Uganda, the Pearl of Africa! Uganda is a landlocked country located in East Africa, known for its diverse wildlife,…

Leave a Reply

Your email address will not be published. Required fields are marked *