The Housing Finance Bank (HFB) has sourced for a Shs45 billion credit facility from the European Investment Bank (EIB) for the Ugandan small and medium enterprises (SMEs) that don’t have ready cash to invest in projects.
Philip Miiro-Kwagala, the HFB Head Business Banking, said the loan targets SMEs dealing in agro industry, fishing, food processing, manufacturing, construction, transport and tourism. Others are; private educational institutions and health care services.
Further, according to Miiro-Kwagala , SMEs implementing both large and small projects have chance to borrow money up to the tune of Euros 200,000.
He says SMEs can use the money to complete buildings such as hotels, hospitals, buy machinery or even acquire land for development.
The loans, he says can be given in Ugandan shillings or United States dollars, attracting a fixed interest rate of 14.5 percent for the entire term of the loan.
“The large or small projects to be funded are those within the sectors mentioned,” Kwagala says. However, the bank can only fund up to 50 percent of the total project cost.
He says the projects can be funded from 3-10 years, depending on their size. “Large projects are between 4-10 years while small projects are between 3-7 years,” he adds.
Specialising in mortgage financing, the HFB is owned by National Housing and Construction Company (0.82%), National Social Security Fund (50%), and the Government of Uganda (49.18%), with paid up capital of Shs 61 billion.
