Kampala, Uganda | THE BLACK EXAMINER | The Uganda Development Bank (UDB) has unveiled a financial commitment of UGX150 billion to support contractors affiliated with the Uganda National Association of Building and Civil Engineering Contractors (UNABCEC) by providing more affordable financing.
This announcement follows successful negotiations between UDB and UNABCEC to establish improved loan terms as part of the contractor association’s five-year strategic plan.
Patricia Ojangole, the Managing Director of UDB, addressed the press at their Nakasero Head office, where she highlighted the advantages that Ugandan contractors will gain from this initiative. These benefits include quicker access to affordable and patient capital, reduced appraisal fees, grace periods of up to 12 months, a 12% interest rate lower than prevailing market rates, and access to bid bonds.
Ojangole emphasized that Ugandan contractors require patient capital due to their extended return on investment timelines. She also pointed out that the need for more affordable loans is driven by delayed payments, especially for companies engaged in government projects.
Applications for this initiative are set to open on October 3, 2023, and will close on the 30th of the same month. An evaluation committee will subsequently review the applications against the specified minimum requirements.
Meanwhile, Andrew Muhwezi, the President of the Uganda Institution of Professional Engineers (UIPE), commended UDB for this initiative, noting that it will assist contractors in regaining stability in their operations. Many members of UNABCEC have experienced payment delays from the government, affecting their financial viability.
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