The Minister of Finance, Matia Kasaija has warned Uganda Development
Bank (UDB) to be vigilant and recover all money lent out. FILE PHOTO
Kampala. The Minister of Finance, Matia Kasaija has warned Uganda Development Bank (UDB) to be vigilant and recover all money lent out.
Speaking
at the release of the bank’s results in Kampala, Mr Kasaija said there
was need to ensure that UDB is efficiently managed for the larger good
of the economy so that the bank can offer cheap and affordable
development loans.
“Some of your customers keep going
to State House asking for favours against their poorly performing loans.
Be more vigilante and recover all monies that you lend out,” he said.
UDB, which is wholly owned by government, announced it had cut back the
rate of non-performing loans from 19 per cent in 2016 to 15 per cent in
2017.
However, this was way above the industry average of 7.2 per cent, according to data from Bank of Uganda.
The bank also grew its loan portfolio from Shs183b in 2016 to Shs242b in the previous year.
The bank also grew its loan portfolio from Shs183b in 2016 to Shs242b in the previous year.
UDB,
a successor company to Uganda Development Bank, mainly lends to
enterprises in key growth sectors of the economy such as agriculture,
industry, tourism and housing, among others.
The bank, which has had a fair share of poor performance in the previous years could be on the road to recovery.
The bank, which has had a fair share of poor performance in the previous years could be on the road to recovery.
According
to the financial results, UDB registered a profit of Shs8.3b in 2017,
which it will retain for recapitalisation against a dividend payout.
Interest income was recorded at Shs21.9b up from Shs17.7b in 2016.
Interest income was recorded at Shs21.9b up from Shs17.7b in 2016.
The
bank, which has previously been dogged by scandals reorganised in 2013
as it repositioned itself to play a larger and more visible role in
development financing with a recapitalisation plan that would increase
shareholder’s equity from Shs100b in 2013 to Shs500b.
Dr
Samuel Sejaaka, the UDB outgoing chairman, urged government to ensure
that it adequately recapitalizes the bank to address the desire for
longer term credit.
UDB is key in streamlining Uganda’s development agenda as government seeks to use it as channel through which it can transform Uganda from a peasant population to a modern country by 2040.
UDB is key in streamlining Uganda’s development agenda as government seeks to use it as channel through which it can transform Uganda from a peasant population to a modern country by 2040.
Targeted sectors: According
to Ms Patricia Ojangole, the UDB chief executive officer, agriculture
and agro processing topped the bank’s lending areas with Shs73.4b while
Shs55.5b went to manufacturing.
“The two sectors [agriculture and manufacturing] once well linked and supported will spur economic growth,” she said.
“The two sectors [agriculture and manufacturing] once well linked and supported will spur economic growth,” she said.
rojon@ntv.co.ug
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