UDB disburses Shs502b to 120 projects as jobs and exports climb

Uganda Development Bank channelled Shs502.2 billion into 120 projects in 2025, a 29% increase that the state-owned lender said helped sustain nearly 70,000 jobs and sharply lifted export earnings from the enterprises it financed.

The figures were released Thursday at UDB’s annual general meeting at the Ministry of Finance, Planning and Economic Development in Kampala, where the bank reported double-digit growth across its books and the government approved fresh capital to widen affordable lending.

Enterprises backed by the bank created and sustained 69,202 jobs during the year, a 24.6% rise from 55,553 in 2024. Foreign exchange earnings from those firms jumped to Shs1.84 trillion from Shs1.11 trillion a year earlier, while their production was valued at Shs6.26 trillion and profits topped Shs1.16 trillion. Tax contributions rose 22.5% to Shs387 billion.

Nearly two-thirds of the year’s financing went to agriculture, agro-industrialization and manufacturing, sectors UDB considers central to raising productivity and cutting reliance on imported goods. The bank also allocated Shs124.2 billion as working capital for Ugandan contractors on infrastructure projects and joined the co-financing of the East African Crude Oil Pipeline. Its active customer base reached 689 enterprises across 105 districts, and direct borrowers rose to 112,392.

“Development finance delivers its greatest value when it unlocks opportunities that commercial markets alone cannot provide,” Managing Director Patricia Ojangole said, adding that the bank’s investments target productive enterprises, decent jobs, value addition and higher incomes.

The disbursements accompanied strong headline results. UDB’s total assets grew 27% to Shs2.26 trillion from Shs1.78 trillion in 2024, while net loans and advances rose 6.6% to Shs1.63 trillion. Post-tax profit climbed 9.7% to Shs63.4 billion from Shs57.8 billion the previous year.

UDB attributed the results to prudent risk management, targeted technology adoption and better use of human capital. During the year it earned an AA+(Uga) national rating and a B long-term foreign-currency issuer default rating from Fitch, and kept an A+ rating from the Association of African Development Finance Institutions. Ojangole was named Banker of the Year at the African Banker Awards, and has since become the first woman to chair the Association of African Development Finance Institutions since its founding in 1975.

To sustain the lending, Finance Minister Henry Musasizi said the government had authorized the board to retain the Shs63.4 billion post-tax profit as additional capital, and approved raising the bank’s authorized share capital to Shs5 trillion from Shs2 trillion, creating Shs3 trillion in additional headroom.

“We cannot blame them for not giving our people money, which we have not provided,” Musasizi said, calling capitalization a government obligation.

UDB lends at about 12%, but Musasizi said the government wants borrowing costs pushed below 10%. “In the medium term, we would wish to see a single digit interest rate,” he said. He also pressed management to speed up loan appraisal, approval and disbursement, arguing the bank should be judged not only on money approved but on how much reaches beneficiaries and how fast. UDB approved about Shs518 billion during the period and disbursed about Shs502 billion.

The results came against a backdrop of 6.3% economic growth and inflation easing to 3.3%. Even so, private-sector credit grew 12% to Shs28.6 trillion, below the 16.6% target under the Third National Development Plan and behind regional peers such as Kenya.

Board Chairman Geoffrey Kihuguru said the bank would maintain prudent stewardship of its assets alongside operational efficiency and long-term sustainability.

Musasizi said the government’s broader strategy under President Yoweri Museveni remains focused on supporting the private sector through cheaper credit, affordable electricity and improved transport, with UDB central to efforts to accelerate industrialization, agro-processing, tourism and private-sector growth.