The government, through the Ministry of Finance, Planning and Economic Development, has approved a proposal to increase the capitalisation of the Uganda Development Bank (UDB) from Shs2 trillion to Shs5 trillion.

The announcement was made by Finance Minister Henry Musasizi during the Uganda Development Bank Annual General Meeting held at the ministry headquarters.

The move comes as UDB continues to expand its operations, with the bank’s total assets growing to Shs2.2 trillion in 2025, up from Shs1.78 trillion in 2024.

Against the backdrop of this growth, Minister Musasizi urged the bank to consider reducing the interest rate charged on loans to the private sector from the current 12% to 10% or lower.

Musasizi said increased capitalisation, coupled with lower lending rates, would encourage more private-sector players to borrow from UDB and ultimately contribute to economic growth.

UDB Managing Director Dr Patricia Ojangole attributed the bank’s growth to government support and financing from development partners.

Ojangole said the bank would assess the government’s proposal to lower interest rates to determine its feasibility, noting that UDB must ensure that it remains financially sustainable and does not operate at a loss.

End