The Ministry of Finance has revealed that loans borrowed by Uganda Development Bank (UDB) and Islamic University in Uganda have pushed government-guaranteed exposure to $130.1 million (Shs 488.1 billion), highlighting growing fiscal obligations tied to the two institutions.
According to the Ministry, the 11 guaranteed loans had a disbursed and outstanding balance of US$76.3 million by the end of December 2025.
“This means that only about 58.7 percent of the guaranteed amount had been drawn down and outstanding by end of December 2025,” the Ministry explained.
The report further shows that the outstanding guaranteed amount increased over the last quarter of 2025.
“Between September and December 2025, the outstanding guarantee increased by $3.41 million, representing a 4.7 percent increase,” the Ministry noted.
Officials attributed the rise mainly to a new disbursement from an international lender.
“The increase was mainly due to a new disbursement of about $5.15 million from the European Investment Bank, which had no outstanding balance in September 2025,” the Ministry stated.
It added that the new inflow offset repayments made on other loans during the same period.
“This addition outweighed scheduled repayments by other creditors. Without this new disbursement, the outstanding balance would have fallen because several loans made scheduled repayments,” the statement reads.
Government guarantees are treated as contingent liabilities and can become direct obligations if borrowers fail to repay, posing potential risks to the national budget.
