UGANDA – Kampala | Real Muloodi News | Based on the Daily Monitor report, Uganda Development Bank (UDB) will only provide loans to committed and financially sound companies, according to Ms. Patricia Ojangole, the bank’s Chief Executive Director.
Ms. Ojangole, speaking at the Northern Uganda Business Forum organized by UDB and Operation Wealth Creation in Gulu, said UDB had been criticized for not lending to struggling small and medium enterprises (SMEs). She stated they would only lend to companies that have shown their ability to repay the money lent to them.
“We are not going to just throw money around, we need to invest money into viable enterprises that can help the private sector and the country to develop. We expect that you have at least two of the factors, land or labour on which we can base to give you the missing capital,” she told the Daily Monitor.
The government recently increased access to credit at UDB. This empowered UDB to offer low-interest loans to various businesses, especially in agribusiness, value addition, manufacturing, tourism, hotel, and accommodation.
According to the Daily Monitor, Ms. Ojangole stated that even though they have over USh 500 billion in capital funding, they will only give loans to reputable businesses. They will give the ones that are licensed, have the documents, and the potential to affect the economy positively.
The public has criticized the bank for imposing unnecessary requirements. Most SMEs cannot meet those requirements or access cheap capital.
In June last year, the Ministry of Finance announced that it would recapitalise UDB with USh 1 trillion to help the economy recover from the effects of Covid-19. Conversely, a statement by UDB stated they received no funds from the government to bail out troubled businesses that were adversely affected by Covid-19, the Daily Monitor reports.
During the meeting, Mr. Salim Saleh, the chief coordinator of Operation Wealth Creation, requested that UDB ease the terms of obtaining financing. He stated it is important to help companies, especially now that they are struggling.
“It is important that the conditions are loosened to enable these entrepreneurs to access the money,” he said.