UDB Releases Impressive Third Quarter Results with Specific emphasis On SMEs

By Bob Tumwesigye

Uganda Development Bank Ltd (UDB has today released its Third Quarter (Q3) of 2022 results highlighting solid growth as the Bank continues to facilitate economic recovery through tailored interventions that suit the country’s development needs. The Third Quarter results which covered the months of July, August, and September, UDB’s investment portfolio (gross loans) improved by 15% to close at Shs1.18trn. Compared to the previous year, the annual growth registered was in the highs of 57%.

During the quarter, UDB approved funding amounting to Shs333bn and disbursed Shs237bn.

Releasing the Third Quarter results, Ms Patricia Ojangole, the Managing Director of UDB said that the funding was allocated to 72 projects across the country and operating within UDB’s priority sectors. “In line with its strategy, the bulk (80%) of these approvals were towards projects engaged in primary agriculture (Shs83bn); Agro-processing (Shs48bn) and manufacturing (Shs180bn),” said Ojangole, during the release of the results. “The investments approved in Q3 improved the Bank’s 2022 approvals (since January 2022), to UGX797 billion, registering a 66% increase versus the UGX479 billion approved in the same period last year. This funding will support 201 projects across the country,” she added. She added that the Bank continues to avail the much-needed liquidity of funds to boost the capacity and resilience of private enterprises. She said that in Q3, Shs237bn was released to various businesses, of which Shs167bn (70%) was allocated to the Bank’s three priority sectors – with primary agriculture receiving Shs8.3bn, Agro-processing Shs64n, and manufacturing Shs95bn, while other sectors/services (including infrastructure, tourism, and human capital development) accounted for 30% of the disbursements (Shs70 billion in value). She said that the total disbursements for January to September amounted to Shs556bn, more than doubling the Shs273bn deployed during the same period in 2021.

She said Bank approved funding amounting to Shs7.1bn during Q3 Under its specialized intervention fund (dubbed the “UDB Special Programs”) that directly target support to the Small and Medium Enterprises (SMEs), Youth, and Women-owned enterprises. She said the above brings the total approvals to SMEs in 2022 to Shs20.2bn to support 91 enterprises. “The Bank will continue to focus on these segments to holistically address the issues that systemically challenge their access to credit, including but not limited to building enterprise capacity,” Ms Ojangole added.

She said the projects approved for funding are projected to generate various development outcomes, including 33,060 jobs. “Upon full implementation, these projects are also expected to generate additional output value of Shs8.9tn, from which Shs365bn in taxes will be paid to the Government.

Under its Business Accelerator for Successful Entrepreneurship (BASE) intervention, the Bank in Q3 also implemented an Enterprise Development Program across the various regions of the country. Conducted in partnership with government agencies including the Uganda Revenue Authority (URA), National Social Security Fund (NSSF), Uganda Registration Services Bureau (URSB), and Uganda National Bureau of Standards (UNBS), she said the training sessions aimed to support nascent SMEs on their journey to professionalize their operations, their formalization and building their capacity to be credit ready. The regional sessions targeting 1,130 SMEs, were conducted in Kampala, Mbarara, Fort Portal, Lira, Gulu, Arua, Masaka and Mbale districts.

“At the end of the quarter, the Bank’s total assets amounted to Shs1.44tn, growing by 19% from Shs1.21tn at the start of the year. The growth in the assets and loan book is on account of sustained growth in funding over the recent past both from Government capitalization and draw down of lines of credit from bilateral and multilateral funders,” she said. She said that the Bank remains a sustainable institution, generating adequate resources to sustain its operations and meet its financial obligations. “During the quarter, the Bank received Shs26.65bn from the Y2022/23 Government of Uganda budgetary allocation, increasing the capital receipts in 2022 to Shs86.1bn,” Ms Ojangole said.

To match the ever-growing demand for long-term (patient) and affordable capital, she said the Bank is deploying various mechanisms to diversify its funding base, and to complement the capital allocations from the Government of Uganda. “The Bank remains committed to making a meaningful contribution to improving the quality of life of Ugandans,” she concluded.