The Uganda Development Bank Ltd (UDB) has announced special packages that it says are aimed at the sustainable growth of the key sectors of youth, women and SMEs.
The packages dubbed ‘Special Programmes’ are Kazi SME Loans, Youth Step-Up Loans and the Women Prosper Loans.
In addition to these segments, UDB has also introduced a Business Accelerator programme that aims to assist enterprises to formalize as well as professionalize their operations thereby ensuring sustainable businesses.
Speaking at the launch of the Special Programmes on Tuesday in Kampala, Ms Patricia Ojangole, the Managing Director of UDB, said the offerings re-affirm their position as a bank for the sustainable and socio-economic development of Uganda.
“Our aim is to offer a definitive end-to-end solution for the growth and sustainability of business in the Youth, SME and Women-led business segments, which are the new engines of development in Uganda especially during this time when the country is looking towards the much-needed economic recovery,” she said.
“To address some of the critical constraints to access to credit, the Bank will implement more accommodative arrangements on cost of credit, collateral requirements, equity contributions, simplified loan processing and requirements among others. And to ensure scaling up of entrepreneurship and sustainability of the businesses, all qualifying businesses will benefit from UDB’s tailored offer that provides advisory services, now referred to as BASE,” she added.
On flexible collateral arrangements for example, land agreements can be used. The use of land agreements, the Bank explained, is to make the offer accessible to majority of Ugandans for whom land is the most available security.
In practice for example, UDB will rely on a simple agreement such as a sales agreement or even advance loans on customary title while helping an applicant process the land by surveying and titling the land.
SMEs, Women and Youth were identified in the Bank’s strategy as cross cutting issues in the sectors served by the Bank. Those that will therefore benefit are those doing business in the sectors supported by UDB to include Hospitality, Tourism, Human Capital Development, Agriculture and Manufacturing.
The youth in Uganda form 77 per cent of Uganda’s population however 70 per cent of the segment is unemployed while 65 per cent of persons engaged in business are women. Yet, 90 per cent of the private sector is small businesses which contribute over 80 per cent of manufactured products and 75 per cent of Gross Domestic Product.
“The statistics above are an exhibition that these segments are pivotal for the country’s development, and they lie at the core of UDB’s purpose of improving the quality of life of Ugandans,” Ojangole said.
UDB plans to roll out the program in all the regions of the country as part of an expansion plan of the Bank’s presence.
Presiding over the launch, Finance Minister Matia Kasaija said UDB is recognizing the important role that SMEs play in championing social-economic transformation.
“Over 8.5 million people are employed in the SMEs. SMEs compute an important segment in manufacturing, agriculture, etc UDB is recognizing the important role that SMEs play in championing social-economic transformation,” he said.
According to a UDB statement, UDB is now offering the lowest rates on the market – as low as 10%. Also, the loan repayment period is up to 8 years with a grace period of 2 years for all applicants.
The Bank has also simplified the loan access process that is now limited to filling a single form.
“Sole proprietorships, for example, equally qualify with registered partnerships, associations, cooperatives or limited companies” she said.
The minimum loan amount under the SME Kazi Loan is Sh50 million, while the minimum under the Women Prosper and Youth Step up loans in Sh100m. Women and Youth who require less than Sh100m can be supported under the SME Kazi Loan.