Uganda Development Bank (UDB), the country’s national development finance institution, has achieved an exceptional National Long-term Rating of ‘AAA (uga)’ with a Stable Outlook, the highest rating on Uganda’s national scale. This prestigious rating was assigned by Fitch Ratings, a globally renowned international credit rating agency. Additionally, the Bank received a Long-Term Issuer Default Rating (IDR) of ‘B+’ with a negative outlook, aligning with Uganda’s Sovereign rating, as the Bank is wholly owned by the Government.
The ‘AAA (uga)’ rating reflects UDB’s robust institutional health and underscores the sustainability of the Bank. During the press announcement at the UDB offices, Managing Director Patricia Ojangole expressed gratitude to the various stakeholders, particularly the Ugandan government, for their ongoing support, ensuring the Bank fulfills its mandate effectively.
Achieving the highest possible national rating demonstrates UDB’s sound financial health in fulfilling its obligations to lenders and its policy mandate to support key sectors of the economy with significant potential for socio-economic development.
Fitch Ratings conducts a comprehensive assessment of participating institutions based on a common set of parameters to assign credit ratings. These ratings guide investors in identifying investments with lower default risk and solid return prospects.
For UDB and other Development Finance Institutions worldwide, credit ratings play a critical role in enabling funding partners to assess their stability. Key drivers of UDB’s exceptional rating include its significant policy role as Uganda’s primary development bank, preferential lending terms to strategic sectors like agriculture, agro-processing, and manufacturing, reliance on shareholder equity and government-guaranteed low-priced borrowings, and its commitment to serve underserved and potentially riskier sectors.
The Bank’s financial sustainability, with annual operating returns on assets averaging 4.5% from 2019 to 2022, further bolsters its positive rating. With this impressive rating, UDB gains access to funding from multilateral funders at lower rates, widening its audience of funders and enhancing its ability to transform the lives of Ugandans through impactful projects.
UDB extends its appreciation to the Government, the Ministry of Finance, and other stakeholders for their instrumental support, contributing to the Bank’s growth and success. The Bank remains committed to identifying opportunities that positively impact the quality of life and advance Uganda’s socio-economic agenda.
In conclusion, UDB’s ‘AAA (uga)’ rating signifies its strong financial position and unwavering dedication to driving socio-economic development across Uganda. This achievement opens doors for greater funding opportunities, ensuring the Bank’s continued positive impact on the nation’s growth and prosperity.
