Museveni urges businesses to leverage affordable credit from UDB

President Yoweri Museveni has called on business owners, particularly manufacturers and agriculturalists, to take advantage of affordable credit provided by Uganda Development Bank (UDB).

The president made this appeal while launching Uganda’s new 600 MW hydropower project, bringing the country’s total installed capacity to over 2,000 MW, up from 380 MW in 2005.

“Money from the banks must not attract high interest rates because if the interest is high, how will you make profits? That’s why the government insisted on UDB. Borrow from UDB, Emyooga, and the Parish Development Model (PDM). Avoid money lenders—I’m going to deal with them,”

He criticized money lenders as “criminals” who exploit borrowers, citing instances where people are forced to sign agreements that unfairly strip them of their assets.

Museveni highlighted the need to lower the cost of credit, underscoring the importance of addressing barriers in key sectors—commercial agriculture, manufacturing, services, and ICT—necessary for modernizing Uganda’s economy.

The government, through UDB, has prioritized the support of sectors like agriculture, manufacturing, tourism, human capital, and infrastructure to achieve its development goals.

In 2023, the government capitalized UDB with Shs65 billion, enabling the bank to deliver socio-economic value in terms of job creation, improved production, tax contributions, and foreign exchange generation.

That same year, UDB disbursed Shs610 billion, with agro-industrialization receiving Shs187 billion, manufacturing Shs211 billion, and primary agriculture Shs39 billion.

Museveni’s call echoed similar remarks made by State Minister for Kampala and Metropolitan Affairs, Kabuye Kyofatogabye, during a trade exhibition at Namukekera – Liao Shen Industrial Park in Nakaseke District. The minister urged business owners to utilize UDB’s low-interest loans and avoid misusing government programs.

“UDB is doing remarkable work by providing cheap loans. I encourage entrepreneurs to seek funding from UDB as their interest rates are very low,” Kyofatogabye told attendees at the exhibition.

UDB provides loans to the private sector at interest rates between 10% and 12%. The bank showcased several projects it has funded, including Maganjo Millers, Pura Organics, Ntake Bakery, Eco Plastile, and Sanga Vet.

These projects have not only spurred business growth but also contributed to job creation and tax revenue.

Eco Plastile, which manufactures sustainable roofing tiles from plastic waste, received support from UDB to scale its production.

The company expects to recycle 50 metric tonnes of plastic waste per month, producing 100,000 tiles this year.

Sanga VetChem Ltd, which manufactures veterinary drugs, also benefited from UDB financing, enabling it to expand its operations and create over 200 direct jobs.

In 2023, UDB-funded enterprises contributed Shs236 billion in direct domestic taxes, with manufacturing accounting for 47%, agro-processing 27.9%, and primary agriculture 15%.

Additionally, these projects created or maintained 51,841 jobs, with significant contributions from primary agriculture (39%), agro-processing (32%), and manufacturing (16%).