Who is Getting UDB Money and How? Museveni Government Refuses to Reveal Beneficiaries’ List as Bank ‘Borrows’ Nearly 1 Trillion

Who is Getting UDB Money and How? Museveni Government Refuses to Reveal Beneficiaries’ List as Bank Borrows Nearly 1 Trillion

President Yoweri Museveni’s government has declined to release the list showing names of individuals who have received loans from the Uganda Development Bank (UDB). Yet the bank is in the process of borrowing almost Shs1tn.

The matter of the beneficiaries list came as Parliament discussed the request for approval for UDB to borrow  $175m or Shs641.344bn from BADEA for its capitalisation as well as to guarantee the same bank to directly borrow$100m (Shs366.429bn).

Aringa North MP Godfrey Onzima had tasked government to reveal who the real beneficiaries of UDB loans are since it is funded by tax payers.

He also expressed concern that UDB was running like a Kampala project and that it was not being felt in other regions of the country.

“When we went into privatisation, we privatised all Government Banks and we have been talking about UDB and trying to capitalise it but this seems to be a bank centralised in Kampala where the money is accessed by very few people,” submitted Onzima.

“I wanted to know from Government when at least they will decentralise it at least to regional level because we are talking of UDB, it doesn’t portray any national characteristics and even if one goes there to access money, there are hurdles you jump until you give up. You can’t know who are the people accessing money from this UDB. It seems to be a bank for some specific people.”

Minister of State for Finance Henry Musasizi cited the confidentiality clause in the bank’s agreements with borrowers.

“All the information the colleague wants us to provide is available in our records. However, this is the Bank that deals with the private sector and there is a client relationship which the Bank has with its borrowers and one of the conditions is that the Bank shall confidentially keep the information of its clients,” submitted Musaasizi.

“This question isn’t new, it has arisen before and when it arose, we preferred to share information with you Speaker, but not with the Public.”

President Museveni has previously praised UDB. Speaking at the launch of Piston Medical Ltd, a pharmaceutical manufacturing plant in Namanve Industrial Park, in February 2025, the president saluted UDB and promised to give it more money to support local businesses.

“Thank you for doing your work. The money belongs to the government, and you lend it to our people,” Museveni said.

“We shall continue injecting funds into UDB to ensure our people access capital and do good work.”

All you need to know about UDB

The Uganda Development Bank Limited (UDB) was the first national development finance institution (DFI) in Uganda established under Decree No. 23 of 1972 (later the Uganda Development Bank Act Cap. 56 of 1972), which Act sought to “establish the Uganda Development Bank and the Credit Guarantee Fund and for other matters connected therewith”. The main objective of UDB was to promote and finance investment in various commercial sectors of the economy with particular emphasis on agriculture, industry, tourism, housing and commerce. In order to achieve its objective, UDB was empowered, by its statute, to provide financing in the form of loans and by way of equity participation using funds borrowed from both local and foreign sources. As per the decree that established it, UDB was required to finance projects that were technically feasible, commercially and economically viable and socially desirable. Priority was given to: Existing projects requiring small assistance to improve their operations; Projects with a scope to maximize utilization of the country’s resources and add value to local products; Projects aiming to produce quality products at internationally competitive prices targeted for export; [and] Projects creating new job opportunities.

Backed by guarantees of the Government of Uganda, UDB succeeded in obtaining large credits from external financiers, notably African Development Bank, International Development Association, European Investment Bank, European Economic Community, Kuwait Fund, Organization of Petroleum Exporting Countries (OPEC Fund) and Arab Bank of Economic Development in Africa (BADEA). In 1993 under the Public Enterprise Reform and Divesture Act Cap. 98 an act to reform and divesture public enterprises, the Government of Uganda categorized UDB Class III under public enterprises in which Government would divest fully from its bid to privatize state-owned enterprises/entities. By 1997 at the end of its 25 years of operation, the bank had built up a loans portfolio in excess of US$170 million, all in the form of term loans, covering major industries in Uganda. The major industries financed by the bank included livestock, processing of fish, tea, coffee and cotton for export and manufacturing of sugar, cement, and various other industrial products.

Until 1997, when the restructuring programme commenced, UDB’s only activity was term lending with the purpose of financing business investment in the economy. All UDB’s activities were ceased as part of the restructuring programme i.e. no additional funds were disbursed on the outstanding loans nor were any new loans extended. As such, from 1997 to 2000, when the technical restructuring of the Bank was completed, the Bank concentrated on the recovery of outstanding loans, which portfolio was classified into performing and non-performing loans and this was done through the Non-Performing Assets Recovery Trust (NPART), a debt collection agency set up by the Government of Uganda under the Ministry of Finance.

In 2001, Government sanctioned the Bank to resume limited lending operations financed out of the Bank’s internally generated funds. The lending operations were initially restricted to existing customers and for a period not exceeding 2 years but over time adjusted for specific cases to periods ranging from 2 – 5 years. The Government decided to vest the mandate of UDB into the ambit of Uganda Development Bank Limited, a limited liability company wholly owned by the Government of Uganda (with equal shareholding of the Minister of Finance and Minister of State for Investment-formerly Minister of State for Privatization) on 31st May 2001. This was made operational in law under the Public Enterprise Reform & Divesture (Vesting of undertaking of UDB) Instrument of 2002. UDB currently operates under the scope of the Companies Act.” (From UDB website).

You can see the list of Uganda’s most profitable and loss-making banks Here and There.

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