UDB eyes lower lending rates as capital base grows

What the report says

Uganda Development Bank (UDB) says it may be able to lower its current 12% lending rate if its capital base continues to expand, according to remarks from Managing Director Patricia Ojangole at the bank’s Annual General Meeting in Kampala on Thursday. The meeting, held at the Ministry of Finance, Planning and Economic Development, also covered UDB’s 2025 financial and development performance.

Nile Post reported that Ojangole said the bank has already seen lending rates decline in recent years, but any further cuts would need to remain financially sustainable. She said the bank is monitoring conditions and other factors before deciding how far borrowing costs could fall. Finance Minister Henry Musasizi said government support for UDB is meant to strengthen its ability to provide affordable finance to the private sector.

The bank said demand for long-term funding has risen alongside Uganda’s economic expansion, with most approvals and disbursements going to agriculture, commercial agriculture, manufacturing and industry. Those sectors account for roughly 65% to 70% of UDB’s loan book, reflecting their role in production and value addition.

UDB also reported growth in 2025, with total assets rising 27% to Shs2.26 trillion, equity increasing to Shs1.89 trillion and disbursements up 29% from 2024. The bank said stronger capitalisation has improved stakeholder confidence and could help it attract more financing from government shareholders and international lenders.