Uganda Development Bank Ltd (UDBL), the country’s national Development Finance Institution, in partnership with the European Union, has announced a special call for eligible businesses in the tourism sector to apply for and receive up to Shs1 billion in grants and soft loan with flexible terms aligned to the current needs of the sector.
The Facility is intended to give operators access to working capital to fast track recovery post the Covid-19 devastating effects and support initiatives to become more environment friendly.
“At the onset of the Covid-19 pandemic, Uganda, like other countries, sanctioned travel restrictions within and out of the country. The Travel restrictions and Standard Operating Procedures Contribute to a severe contraction of business opportunities and viability of business resulting in closure for some and eventual loss of jobs. This Facility is targeting the recovery of these businesses as they take advantage of growing tourist traffic both local and foreign,” Ms Patricia Ojangole the Managing Director of UDB said during the launch of the Call.
The total Facility is over Shs62 billion made up of Shs 40 billion ring-fenced funds from UDB and complemented by a grant of Shs21.8 billion from the European Union. Under this facility, only customers that qualify for the loan will be eligible for the grant.
The flexible facility offers a low interest repayable within a five-year period with a two-year grace period. UDB will also provide business advisory services under the Business Accelerator for Successful Entrepreneurship (B.A.S.E) to assist intending applicants meet the criteria for the application. Complementary environmental assessment by a certified organization will also be offered to successful applicants to facilitate the improvement of their environmental footprint through among others better waste management and renewable energy sources.
“The call is open to legally registered businesses that have been in operation for at least two years. Additionally, applicants must demonstrate that their businesses will be able to retain their employees during the period of the loan,” Ms Ojangole added.
“UDB remains committed to agile innovations to match the needs of our customers and to support the mission of the Bank in improving the quality of lives of Ugandans through high impact interventions. We thank the European Union for partnering with us in this cause especially during this time when working capital is crucial to the recovery and growth for businesses in this vital sector.”
This programme was designed in 2020 in partnership with key stakeholders in the sector to respond to the COVID-19 pandemic and its impact on businesses operating in the tourism and hospitality industry.
“For this second call, a lenient criterion has been adapted to better meet the needs of the sector today,like incorporating the list of eligible expenditures the company initiated to make tourism establishments more environmentally friendly.This could include investments aiming at improving waste management, promoting the use of alternative sources of energy, and going digital among others. Indeed, the EU is committed to supporting the tourism sector in Uganda to ensure many more people from all over the world come and visit this beautiful and amazing country,” Caroline Adriaensen, EU Head of Cooperation.