Struggling businesses to receive sh31.5b from Government

The UDB managing director, Patricia Ojangole, said the development bank has approved sh31.5b to facilitate the development of about 128 enterprises facing problems in accessing capital from formal banks.

“The bank has developed specialised programs to support key demographic and business segments that would otherwise find it difficult to access capital. These are SMEs, women, and youth. The bank committed to allocate up to 20% of its core capital to finance eligible enterprises within these three segments,” Ojangole said.

She said this is being done to ensure that various businesses are supported and, in the process, the country will be able to increase its tax base.

The sh31.5b to be offered to struggling businesses is 20% of the UDB’s core capital.

She made the remarks while officiating at the passing out of the Uganda Development Bank staff who had completed a transformative leadership training at the National Leadership Institute, Kyankwanzi. The function was also graced by Vice-President, Jessica Alupo.

There have been concerns from some business people who allege that UDB unfairly distributes the money meant to help struggling businesses.

Lilian Alinda, a proprietor for a two-year old company, Moment Fashions & Films Limited located in Kayunga along Gayaza Road, during an interview with one of the media houses said she was frustrated when she tried getting a loan from UDB.

Alinda said she gained hope when Government announced a stimulus package for businesses in the FY2020/21 national budget.

She went to UDB to seek credit support to recapitalise her small but promising business.

Government said it would inject slightly over sh1trillion in UDB to be accessed by struggling firms at an interest rate of 12%.

On reaching UDB, Alinda said she was referred to Postbank – which disburses some of the money on its behalf. She only wanted sh25m.

However, the bank executives told her that one of the conditions to access the stimulus package funds was that she needed to borrow a minimum of sh100m and stake collateral that is above that amount.

“I left and have never returned,” she said, adding that her business could not expand because it now lacked capital.