ADB lends Uganda $20m to spur SMEs growth
Kampala, Uganda (PANA) - The African Development Bank (ADB) has advanced a loan of $20m to the government of Uganda to help develop small and medium-scale enterprises (SMEs) in the East African country.
The loan was advanced to Uganda through Uganda Development Bank (UDB) after Parliament approved a sovereign guarantee to secure the borrowing. The borrowed funds will be on-lent to SMEs in the country.
The need for affordable credit in Uganda is palpable. With commercial lending rates hovering around 20 percent, many SMEs can ill afford credit, and a number of them that borrow at commercial rates often fail to pay off the debts.
The government, therefore, has in recent years often spoken about recapitalizing UDB to provide relatively cheaper credit to businessmen and farmers, at 12 percent interest rate. UDB’s clientele is composed of 90 percent SMEs.
“The funding will further bolster the Bank’s capacity to provide medium and long term development financing to business enterprises operating in priority sectors of the economy …,” a statement issued by UDB says.
The statement quotes Kennedy Mbekeani, the ADB country manager for Uganda, as saying at the signing of the agreement: “We pledge to work with UDB to build relationships with the beneficiaries of the funding.”
-0- PANA EM/RA 25May2019
