The government has increased its capitalisation of the Uganda Development Bank Limited (UDB) to Shs1.6 trillion after allocating an additional Shs442.2 billion to the development finance institution in the 2026/27 financial year.
The capital injection is aimed at strengthening UDB’s ability to provide affordable and long-term financing to businesses and strategic sectors of the economy as Uganda seeks to expand investment and reduce financing gaps.
Government is relying on UDB to provide what is commonly referred to as patient capital—long-term financing that supports productive investments in sectors such as agriculture, manufacturing, infrastructure, and services.
The move comes amid concerns that private sector credit growth remains below national targets. According to figures cited in the report, private sector credit grew by 12 percent, from Shs25.5 trillion in 2024 to Shs28.6 trillion in 2025, below the 16.6 percent target under the Third National Development Plan.
UDB’s performance has continued to expand, with the bank’s total assets growing by 27 percent to Shs2.26 trillion in 2025, up from Shs1.78 trillion the previous year. During the same period, the bank approved Shs518.4 billion in new funding for 120 projects across the country.
Agriculture, agro-industrialisation and manufacturing received the largest share of financing, with Shs261 billion directed towards these sectors, while Shs60 billion supported the services sector. The bank also provided Shs124.2 billion in working capital for Ugandan contractors involved in infrastructure projects.
UDB disbursed Shs502.2 billion in 2025, representing a 29 percent increase from Shs388.7 billion in 2024. The bank’s active client base expanded to 689 clients across 105 districts, up from 524 clients in 92 districts.
The bank’s gross loan portfolio increased to Shs1.77 trillion, with about 60 percent of the portfolio invested in agriculture, agro-processing and manufacturing enterprises.
Government has positioned UDB as a key institution in its ambition to transform Uganda’s economy by supporting industrialisation, job creation, and private sector growth.
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