Kampala, 27th February 2024 – The Uganda Manufacturers Association (UMA), has signed a Memorandum of Understanding (MOU) with KCB Bank Uganda aimed at boosting the production of goods and easing the operations of manufacturers in Uganda, through extending favourable financial products and terms.
This partnership will ensure that members access capital expenditure including asset backed financing to purchase and service equipment, project financing for expansion, working capital financing like overdrafts, import loans for raw material purchases, contract finance to execute contracts and invoice discounting to bridge delayed payment gaps, among other services.
While delivering his opening remarks, Mr. Deo JB Kayemba, the UMA Board Chairman noted that UMA’s third strategic goal focuses on enhancing partnerships. In line with this, UMA is actively working to strengthen its collaboration with institutions such as KCB, aimed at optimizing benefits for members. This includes securing negotiated interest rates and ensuring preferential treatment from the bank and training on financial literacy to hand-hold SMEs.
According to Mr. Kayemba, “Manufacturing is a driver of economic growth and development in any thriving economy. However, the challenge of accessing affordable, long-term business credit, particularly for Small and Medium Enterprises (SMEs), remains a formidable obstacle in Uganda, with an access rate of only 22.9%. This limitation impedes the growth of the manufacturing sector, hindering its full potential contribution to the country’s economy.”
A survey conducted by UMA in 2019 revealed that 80% of SMEs in the manufacturing sector faced difficulties in accessing affordable long-term business credit. The access to lease finance or other forms of non-bank financing for manufacturing firms in Uganda stood at only 22.9% in 2020. A mere 12.3% of manufacturing firms reported having access to bank loans or credit lines, significantly lower than the national average of 19.4% for all firms in Uganda. Among manufacturing firms with access to bank loans, 44.5% cited high-interest rates as the major challenge in accessing finance.
Speaking at the MOU signing, Mr. Edgar Byamah, KCB Bank Managing Director said, “Today, we are excited to further expand our partnership network to the vibrant manufacturing sector of Uganda and I am happy to note that this partnership aligns with KCB’s vision of being the preferred financial solutions provider in Africa with a global reach. We believe by partnering with Ugandan manufacturers that are looking to market their products locally and abroad, we will enable sustainable development.”
Also in attendance, Ms. Mary Mukasa Babirye, KCB Bank Trade Finance Manager, expressed her delight at this step taken by both parties, “The MOU with UMA solidifies the commitment to fostering cooperation between the two entities. Under this strategic partnership, KCB Bank Uganda will extend affordable, convenient, and tailored financing facilities to UMA members. These facilities are designed to support the growth and development of the manufacturing sector in Uganda.”
This partnership will ensure that members access capital expenditure including asset backed financing to purchase and service equipment, project financing for expansion, working capital financing like overdrafts, import loans for raw material purchases, contract finance to execute contracts and invoice discounting to bridge delayed payment gaps, among other services.
Being a regional Bank, UMA is pleased to leverage their presence to grow businesses as within the Africa, Continental Free Trade Area (AfCFTA).
About KCB Bank Uganda
KCB Bank Uganda is an all-inclusive financial service provider that focuses on providing innovative banking solutions. It is licensed by the Bank of Uganda, the central bank and national banking regulator. The Bank has 14 branches spread across the country,15 ATMs, 385 Bank Agents and 295 Merchant outlets, that provide a wide range of products and services. Its mission is “To drive efficiency whilst growing market share in order to be the preferred financial solutions provider in Africa with global reach.”
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