Musasizi, together with the Minister of State for Investment, Amina Moulazi, thanked the board of directors and the management of UDB, led by Board Chairman Jeffrey T. Kihuguru, following the release of the bank’s 2025 annual report. During the period under review, UDB recorded a post-tax profit of 63.4 billion Ush, assets amounting to 2.26 trillion Ush, and a total loan portfolio of 1.77 trillion Ush. The bank also reported disbursing 502.2 billion Ush to 112,992 borrowers, and its operations, according to its own data, contributed to the creation of 69,202 jobs.
These indicators are encouraging, but the main measure of UDB’s effectiveness should remain the development impact of the loans it issues. «Every shilling invested should be turned into jobs, stronger businesses, higher production, exports, and the economic transformation of Uganda», the minister said.
UDB should continue to focus on providing affordable long-term financing to producers, small and medium-sized businesses, and other enterprises in the real sector, as Uganda works to strengthen its industrial base. «UDB is the country’s development bank. Its task is to support the national development agenda, including by providing affordable financing to the private sector», Musasizi said.
The Cabinet has authorized UDB to retain about 63 billion Ush from its 2025 profits as additional capital and also intends to increase the bank’s authorized capital. «We have also approved a proposal to increase UDB’s authorized capital from 2 trillion Ush to 5 trillion Ush. In other words, this means an additional increase of 3 trillion Ush», he explained. According to the minister, these steps are intended to strengthen the development bank so that it can offer affordable financing to businesses and projects across the country.
He also noted that UDB currently lends at 12% per annum, but the government expects to reduce borrowing costs to 10% in the medium term and later bring them down to single-digit levels. «This is exactly what we are striving for. We want more of our citizens to be able to access loans from UDB at affordable rates», he said.
The government will continue to support the bank through recapitalization and has allowed it to explore opportunities to attract external sources of funding. The minister emphasized that UDB’s lending strategy should remain aligned with the Fourth National Development Plan, especially in sectors considered key to economic transformation. These include agro-industry, mineral resource development, science, technology and innovation, manufacturing, agriculture, agricultural processing, the furniture industry, and tourism.
He also called for faster processing of loan applications, stressing that viable projects should not remain in the bank’s queue for an unreasonably long time. UDB should expand its presence beyond Kampala so that entrepreneurs and companies in other parts of Uganda can benefit from development financing without having to travel long distances. «We want the bank to be more visible and accessible beyond Kampala so that residents in different parts of the country can benefit from its financing», he said.
Government support will be accompanied by expectations of greater efficiency and concrete results. According to Musasizi, UDB has currently disbursed approximately 1.7 trillion Ush, but demand for development financing remains high. The bank’s managing director, Patricia Ojangole, said that the growing capital base and favorable policy environment enable the bank to meet the increasing demand for long-term financing.
A significant share of the new loans approved by the bank is directed to agriculture, commercial farming, manufacturing, and industry — sectors that account for about 60–70% of UDB’s annual growth. «As the economy expands, we are seeing higher demand for support from the bank», Ojangole said.
The bank is working to attract additional funding from domestic shareholders and traditional international lenders to meet the growing demand. Ojangole emphasized that UDB’s ability to attract external capital depends directly on how convincingly the bank can demonstrate the effective use of funds.
The level of non-performing debt at UDB remains within the acceptable risk threshold and stands at about 6.7%. According to her, this has been achieved in part thanks to the bank’s debt collection efforts, which make it possible to recover a significant portion of issued funds.
In response to a question about the 69,202 jobs mentioned in the annual report, Ojangole said that the bank tracks, verifies, and evaluates the employment created through its involvement. She added that UDB will continue to look for ways to reduce lending rates as capital grows and funding sources expand, although the bank must maintain a balance between lower loan costs and financial stability.
Geoffrey T. Kihuguru, Chairman of the Board of Directors of UDB, said that the bank is pursuing a more active development-financing model, helping companies prepare bankable projects, reduce investment risks, and attract private capital. This approach should ensure that UDB funds yield tangible economic results, strengthening businesses and expanding production capacity.
Further recapitalization of UDB by the government is not an end in itself; it is a tool to build the bank’s capacity to finance Uganda’s transformation.
According to the minister, the government expects that growth in the bank’s balance sheet will lead to stronger businesses, more jobs, higher production, and a more active presence of Ugandan companies in both domestic and export markets.
Comments (0)