No Borrower Has Received COVID-19 Bailout Package, Says UDB

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Following the publication of a list of companies and individuals, the Uganda Development Bank has revealed that it has lent no borrowers public resources in form a bailout packages or grants.   

On March 18, the New Vision newspaper published a story, accompanied by a list of clients reported to have benefited from a Government COVID-19 bailout package.

This followed an appearance by UDB management before the Finance Committee of Parliament to present the status of the Bank performance on the March 17 2021.

In a statement released today, the bank has clarified as follows;

1. UDBL is a Government owned Financial Institution, which is funded by Government using public resources, among other sources.

2. As per the Legal framework, Parliament shall ensure that public resources are held and utilized in a transparent, accountable, efficient, effective and sustainable manner. Further, in the exercise of the Committee functions, Committees of Parliament shall have powers of the High Court to Compel the production of documents by public officers, among others.

3. in August 2020, UDBL received funding to implement a component of the Government’s stimulus package, which was specifically to support resilience and self-sufficiency of the economy by ensuring that the country had adequate essential goods and services to mitigate and support faster recovery of the economy from the negative impacts caused by the pandemic.

4. UDBL issued a public call for applications for all eligible beneficiaries dated 10th August 2020 communicating the purpose of the funds, the eligibility criteria, the application process, lending terms, among others. Please refer to our website for details of the call.

5. The said funding was deployed in line with the subsidiary agreement between UDBL and the Ministry of Finance governing the deployment of the funds.

6. UDBL has NOT yet received any funding for bail out of struggling businesses or to be given out as packages or grants to businesses negatively impacted by the pandemic.

7. The list that was published represented all borrowers who applied for funding in form of loans from the bank, underwent the Bank’s objective evaluation criteria and were eligible for funding in line with the Bank’s credit policy. The approvals represent all approved loans in 2020 from January (Pre-COVID) while disbursements are loans disbursed in 2020 having been approved either prior to 2020 or in 2020.

8. Therefore, the published list included loans funded using funds from the Bank’s other funders, other than Government of Uganda.

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9. UDBL did not provide the list of borrowers to the media.

10. No borrower received a covid 19 bailout package as the Bank has not received such funding.

11. The call for applications is still open and we continue to receive applications and interests from all eligible borrowers across the country.

12. Only businesses that meet the eligibility criteria and the requirements of the Bank’s credit policy are considered for funding. UDBL is committed to its purpose of “Improving the quality of lives of Ugandans” and we look forward to continuing working with all our key stakeholders to move our country forward.

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