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We can only lend money to capable SMEs - UDB
Uganda Development Bank (UDB) Chief Executive Officer Ms Patricia Ojangole. PHOTO/COURTESY
Uganda Development Bank (UDB) will only lend to committed and financially stable enterprises, according to Ms Patricia Ojangole, the bank’s chief executive officer.
Ms Ojangole, who was speaking in Gulu at the Northern Uganda Business Forum organised by UDB and Operation Wealth Creation, said the bank has got a lot of criticism for not lending to struggling small and medium enterprises (SMEs), noting they can lend to businesses that have desmontrated capacity to repay money lent to them.
“We are not going to just throw money around, we need to invest money into viable enterprises that can help the private sector and the country to develop. We expect that you have at least two of the factors, land or labour on which we can base to give you the missing capital,” she said.
UDB has been criticised for putting unnecessary conditions that cannot be fulfilled by most SMEs to access cheap capital.
The bank, which government recently recapitalised, has been giving capital support to a number of enterprises, especially in agribusiness, value addition, manufacturing, tourism, hotel and accommodation.
Ms Ojangole said that whereas they possesses in excess of Shs500b in capital support, it will only go to deserving businesses that registered, have relevant documents and have the capacity to impact the wider economy. Recently, UDB, through a notice, said it had not received any funding to bail out struggling businesses or any funds to be given out as packages or grants to businesses negatively impacted by Covid-19.
Government, through the Ministry of Finance, had in June last year indicated it would recapitalise UDB with Shs1 trillion to support recovery of the economy, which continues to struggle due to Covid-19.
During the meeting, Operation Wealth Creation chief coordinator Salim Saleh asked UDB to ease terms of accessing financing, saying it is important to support businesses, especially now when they are struggling. “It is important that the conditions are loosened to enable these entrepreneurs access the money,” he said.
