NAIROBI (Xinhua) --
Uganda bucked the regional trend in East Africa
to record growths in private sector lending in all segments
other than the transport and the building and construction
segments over the past two years, said an industry report
released in Nairobi on Tuesday.
The report by ICEA Lion Asset Management showed that households
and the trade industry accounted for over 40 percent of total
private sector lending in East Africa since September 2016,
while manufacturing accounted for 10 to 15 percent.
There are also the sectors that tend to have the largest share
of small and medium enterprises.
Despite being one of the major recipients of private sector
credit, the manufacturing sector has continued to record slow
growth in terms of economic output, indicating that this crucial
sector faces unique constraints that need to be addressed, the
It said that Uganda stands out in terms of private credit growth
especially in the agriculture and real estate segments.
The real estate sector accounted for 13 percent of the total
private sector credit in Kenya, noticeably higher than that in
Uganda and Tanzania.
Agriculture, the main economic activity in the region, received
between 5 and 7 percent of private sector lending in Kenya and
Tanzania over the last two years, while the number was above 10
percent in Uganda.
Uganda had a larger share of private credit for the building and
construction segment, at 16 percent, compared with the less than
5 percent in Kenya and Tanzania, the report said.
The study also showed that not all sectors have felt the credit
crunch equally since Kenya introduced an interest rate cap in
According to the report, credit flows to the trade and
manufacturing sectors have remained fairly constant at between
400 million and 500 million U.S. dollars in the 20 months before
and after the rate cap.
In contrast, credit flows to the real estate and private
households have halved since the introduction of the rate cap,
while the transport and communications sector has seen a 350
million dollar decline in private sector credit flows since
September 2016, it said.
Uganda gets US five million
dollars loan from India to boost SME growt
KAMPALA Uganda (Xinhua) --
Uganda Development Bank (UDB) has borrowed 5
million U.S. dollars from India to boost the growth of small and
medium-sized enterprises (SME) and facilitate production in the
east African country.
Patricia Ojangole, chief executive of UDB, on Monday said the
seven-year loan from the Export Import Bank of India will
increase UDB’s capacity to provide medium and long-term
She said the money will benefit entrepreneurs whose businesses
require inputs from India in the form of raw materials, tools,
agriculture equipment and various forms of technology.
“As a country, we still lack critical production inputs that we
have to import from countries like India where they are
available. That is why we need specific funding to support that
kind of production,” Ojangole said.
“A lot of SMEs are currently importing agriculture equipment
from India, because India has the technology we don’t have, and
we need to support these SMEs,” she said during the loan
agreement signing ceremony.
Ojangole said the money will go toward supporting enterprises in
the agriculture, agro-industrialization, manufacturing, tourism,
infrastructure, oil and gas and human capital development.
She said her bank will promote appropriate technology transfer
by financing the purchase of modern and appropriate productive
equipment, especially in agro-processing and manufacturing
Ojangole said aside from the new loan, the bank still needs
approximately 20 million dollars to satisfy the current demand
from SMEs waiting to procure agro-value chain equipment from
Depak Kujur, east Africa resident representative of the Export
Import Bank of India, said his bank is willing to offer
additional funding to help grow entrepreneurship in Uganda.
“Although we have known each other for a long time, this is the
first time we are partnering, and for this, we need to see how
the money will be handled and then increase financing,” he said.
warn negative social media reporting to affect industry
KAMPALA Uganda (Xinhua) --
Uganda Bankers Association on Wednesday warned
that the banking industry is likely to get a backlash if
negative reporting continues on social media.
The association, which brings together all commercial banks in
the country, said in a statement that targeted and calculated
negative reporting about the banking sector has the potential of
undermining confidence in the industry.
The association added that this risks triggering undesired panic
with unintended adverse consequences for the economy.
“We are confident that the banking and overall financial sector
is stable and resilient, however maintaining stability remains a
responsibility for all of us and not only the regulator and the
financial institution,” the statement said.
“We further count on the support of the relevant authorities to
continue providing the right environment for sustained growth
for the banking and financial sector.” it said.
There have been a series of social media reports questioning how
Bank of Uganda, the country’s central bank, liquidated Crane
Bank and sold it to DFCU Bank. The central bank has denied any