Government has allocated an additional Shs442.2 billion to Uganda Development Bank in the 2026/27 financial year.
The new funding raises UDB’s cumulative capitalisation to Shs1.6 trillion.
The capital injection is aimed at strengthening the development finance institution at a time when Uganda needs more long-term investment capital.
Government expects UDB to provide affordable and patient capital for private and public investment.
The move comes as official development assistance continues to shrink. It also comes as Uganda prepares for its next phase of development.
Private sector credit still below target
According to Bank of Uganda, private sector credit grew by 12.0 percent from Shs25.5 trillion in 2024 to Shs28.6 trillion in 2025.
However, this performance remained below the 16.6 percent target set under the Third National Development Plan.
Uganda also trailed regional peers.
Kenya’s private sector credit grew by 14.1 percent, while Tanzania recorded 16.6 percent growth in 2023.
Government is positioning UDB to help close the investment financing gap. The bank is expected to support sectors that can drive productivity, jobs and long-term growth.
UDB assets rise to Shs2.26 trillion
In 2025, UDB’s total assets grew by 27 percent to Shs2.26 trillion.
The bank’s assets had stood at Shs1.78 trillion at the end of 2024.
During the year, UDB approved Shs518.4 billion in new funding to support 120 projects across the country.
Of that amount, Shs261 billion, or 50 percent, went to primary agriculture, agro-industrialisation and manufacturing.
Another Shs60 billion, representing 12 percent, supported the services sector.
UDB also allocated Shs124.2 billion as working capital for indigenous Ugandan contractors involved in infrastructure projects.
The bank also participated in co-financing the East African Crude Oil Pipeline project alongside other financiers.
Loan portfolio expands
UDB disbursed Shs502.2 billion in 2025.
This represented a 29 percent increase from Shs388.7 billion in 2024.
The bank also expanded its reach to 689 active clients across 105 districts.
In 2024, UDB had 524 clients in 92 districts.
Its gross loan portfolio rose from Shs1.67 trillion to Shs1.77 trillion.
Up to 60 percent of that portfolio, or Shs1.1 trillion, supported primary agriculture, agro-industry and manufacturing enterprises.
By December 2025, UDB’s direct beneficiaries had reached 83,428 individuals and 886 enterprises.
The bank also financed 112,405 beneficiaries either directly through projects or through innovative financial solutions.
These included fintech platforms, farmer group models and specialised interventions such as electricity and water connection initiatives.
Supported enterprises create more jobs
Enterprises supported by UDB created and sustained 69,202 jobs in 2025.
This was an increase of 13,649 jobs, or 25 percent, from 55,553 jobs in 2024.
The jobs were supported through UDB’s mainstream lending portfolio and special programmes.
These programmes target inclusive growth segments such as youth, women and small and medium-sized enterprises.
Enterprise profitability among supported projects also increased sharply.
It rose from Shs314 billion in 2021 to Shs1.16 trillion in 2025.
Tax contributions from supported enterprises increased from Shs84 billion to Shs387 billion over the same period.
Government has positioned UDB as a key institution in its plan to expand Uganda’s economy tenfold by 2040.
The target is to grow the economy from $50 billion to $500 billion.
UDB enters second year of new strategy
The latest funding comes as UDB enters the second year of implementing its five-year business strategy.
The strategy seeks to expand the bank’s role in transaction structuring, advisory services and development finance mobilisation.
Under the plan, UDB is expected to develop and prepare catalytic programmes.
It will also link funders to investors and support domestic and international resource mobilisation for projects.
The bank is also expected to provide project development and project finance advisory services to government and the private sector.
Its mandate includes building a pipeline of bankable projects and programmes, identifying potential investors and stimulating credit demand.