For the fiscal year ending in July, the Uganda Development Bank (UDB) issued more loans to agro-industrialisation than to any other sector.
UDB, a key player in the economy’s recovery due to weakened growth and disruptions from Covid-19, gave priority to loan applications from agro-industrialisation, manufacturing, and primary agriculture to create economic resilience as well as assist the country in pursuing the import substitution strategy, according to details highlighting the bank’s performance between July 2020 and July 2021.
According to UDB, agro-industrialisation received Shs268 billion over time, while manufacturing received Shs158 billion.
Primary agriculture received Shs104b while infrastructure and tourism and hospitality received Shs74.5b and Shs32.4b, respectively. Health services and education services received the least amount with each allocated Shs13.6b and Shs2.16b, respectively.
Tourism and related activities together with education services have been some of the worst affected sectors and stakeholders have previously indicated that there is a need for a deeper conversation beyond the current injections that have had little impact.
The approvals, according to UDB, indicate that the bank has during the period approved loans worth Shs649.25b with at least Shs361.6b already disbursed into applicants’ accounts.
UDB also indicated that the loans had already had an impact on the economy with a number of improvements registered in agro-industrialisation, manufacturing and primary agriculture.
For instance, UDB indicated, about 27,421 jobs were created in agro-industrialization while 1,452 and 2,698 were created in industry and tourism, respectively during the period.
Overall more than 33,785 jobs were created across different sectors with an output value of Shs5.4 trillion.
The reporting period covers economic activity during the ongoing Covid-19 disruptions, which the government is seeking to mitigate through cheap and long term financing to shield key sectors of the economy from volatility as well as boosting import substitution and value-addition.
UDB also announced a new programme in which it will seek to support special groups such as small and medium enterprises, women and youth businesses operating in priority sectors.
Under the programme, UDB said, small-medium businesses will be allowed to access low-cost loans of up to a maximum of Shs720m, while women and youth businesses will have a widow to access up to Shs900m and Shs540m, respectively.