The Uganda Development Bank Ltd (UDBL), the country’s national Development Finance Institution, today has announced offers exclusive to the institution aimed at holistically addressing the growth of three unique segments which include the Youth, Women and SMEs. Complementary to its specialized credit offering to these segments, will be the Business Accelerator program that aims to assist enterprises to formalize as well as professionalize their operations thereby ensuring sustainable businesses.
The offerings which are representative of the heart of growth, job creation and entrepreneurship in the country include the Kazi SME Loans, Youth Step-Up Loans and the Women Prosper Loans. The Bank’s BASE (Business Accelerator for Successful Enterprises) looks to addressing the demand side challenges of access to credit faced by the three segments.
“These offerings re-affirm our 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,” said Ms Patricia Ojangole, the Managing Director of UDB.
“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”
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,” Ms 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.
|KAZI SME LOAN||WOMEN PROSPER LOAN||YOUTH STEP-UP LOAN|
|Small Enterprises with annual turnover from UGX10M – 100M
|By Ownership/ Share-holding – Any enterprise or business where ownership/ shareholding is more than 50% by women.||By – Shareholding: Any enterprise or business where shareholding/ownership is more than 30% by youth.|
|Medium Enterprises with annual turnover from UGX 100 – 360M
|By Leadership/ Management – Any enterprise where:
I. The board is constituted of at least 30% women.
II. Senior Management constitutes of at least 30% women.
|By – Product: Any enterprise involved in skilling or reskilling of youth, i.e., BTVETs, Incubation Hubs etc. Where youth enrolment exceeds 50%.
|By Product – Any enterprise involved in the production of essentials for women including; sanitary items and medical equipment||By – Employment: Any enterprise or business employing at least 35% of youth
|By Employment – Any enterprise or business employing at least 40% women.|
With the new offerings, UDB is offering lowest rates on the market – as low as 10%; and the loan repayment period is up to 8 years with a grace period of 2 years for all applicants.
Simplified access to UDB loans
The Bank has simplified the loan access process and simplified the application 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 concluding that the program welcomes all Ugandan enterprises and entrepreneurs.
Minimum loan amount
While there are varying maximum loan amounts per product, the The minimum loan amount under the SME Kazi Loan is UGX 50 million, while the minimum under the Women Prosper and Youth Step up loans in UGX 100m. Women and Youth who require less than UGX 100m can be supported under the SME Kazi Loan,