- Dr Samuel Sejaaka, the UDB outgoing chairman, urged government to ensure that it adequately recapitalizes the bank to address the desire for longer term credit.
- UDB is key in streamlining Uganda’s development agenda as government seeks to use it as channel through which it can transform Uganda from a peasant population to a modern country by 2040.
Kampala. The Minister of Finance, Matia Kasaija has warned Uganda Development Bank (UDB) to be vigilant and recover all money lent out.
Speaking at the release of the bank’s results in Kampala, Mr Kasaija said there was need to ensure that UDB is efficiently managed for the larger good of the economy so that the bank can offer cheap and affordable development loans.
“Some of your customers keep going to State House asking for favours against their poorly performing loans. Be more vigilante and recover all monies that you lend out,” he said. UDB, which is wholly owned by government, announced it had cut back the rate of non-performing loans from 19 per cent in 2016 to 15 per cent in 2017.
However, this was way above the industry average of 7.2 per cent, according to data from Bank of Uganda.
The bank also grew its loan portfolio from Shs183b in 2016 to Shs242b in the previous year.
UDB, a successor company to Uganda Development Bank, mainly lends to enterprises in key growth sectors of the economy such as agriculture, industry, tourism and housing, among others.
The bank, which has had a fair share of poor performance in the previous years could be on the road to recovery.
According to the financial results, UDB registered a profit of Shs8.3b in 2017, which it will retain for recapitalisation against a dividend payout.
Interest income was recorded at Shs21.9b up from Shs17.7b in 2016.
The bank, which has previously been dogged by scandals reorganised in 2013 as it repositioned itself to play a larger and more visible role in development financing with a recapitalisation plan that would increase shareholder’s equity from Shs100b in 2013 to Shs500b.
Dr Samuel Sejaaka, the UDB outgoing chairman, urged government to ensure that it adequately recapitalizes the bank to address the desire for longer term credit.
UDB is key in streamlining Uganda’s development agenda as government seeks to use it as channel through which it can transform Uganda from a peasant population to a modern country by 2040.
Targeted sectors: According to Ms Patricia Ojangole, the UDB chief executive officer, agriculture and agro processing topped the bank’s lending areas with Shs73.4b while Shs55.5b went to manufacturing.
“The two sectors [agriculture and manufacturing] once well linked and supported will spur economic growth,” she said.