The Uganda Development Bank (UDB) is set to receive a major financial boost after Parliament approved two substantial loans amounting to $200 million, aimed at enhancing the bank’s ability to support Uganda’s economic growth.
During the parliamentary session on Thursday, March 20, 2025, lawmakers authorized a $100 million loan from the Arab Bank for Economic Development in Africa (BADEA) and the OPEC Fund for International Development (OFID) to strengthen UDB’s lending capacity.
Additionally, another $100 million facility was approved from the Islamic Development Bank (IDB), the Islamic Corporation for the Development of the Private Sector (ICD), and the International Islamic Trade Finance Corporation (ITFC).
Despite broad support for the loans, some MPs raised concerns over the distribution of UDB’s financing, arguing that funds often favor a select group of businesses, particularly in Kampala, while leaving other regions underserved.
Hon. Godfrey Onzima (Aringa North County MP) questioned whether UDB’s loans were truly benefiting all Ugandans.
“We are approving large amounts of money, but is this financing reaching entrepreneurs in all parts of Uganda, or is it concentrated in the central region?” Onzima asked.
Speaker Anita Among echoed the concern, emphasizing the need for fairness in fund allocation.
“We need to ensure that these funds are accessible to all Ugandans, not just those in Kampala. The sectoral committee must monitor and ensure equitable distribution,” Among stated.
In response, Minister of State for Finance, Hon. Henry Musasizi, assured Parliament that a detailed breakdown of UDB’s loan distribution across the country would be presented to ensure accountability.
Hon. Esther Apwoyochan (NRM, Zombo District Woman Representative) acknowledged that while UDB has played a crucial role in financing businesses, its reach has not been uniform.
“Although not everyone has accessed UDB’s funds, expanding its financial base will empower more Ugandans, especially in regions that have previously been left out,” Apwoyochan said.
With these approvals, the government aims to fast-track UDB’s capitalisation, ensuring that more Ugandan businesses, especially in agriculture, manufacturing, and small-scale enterprises, benefit from the bank’s financing.
However, Parliament has pledged to keep a close watch on fund distribution to prevent regional disparities.
