Uganda Development Bank (UDB), the nation’s premier development finance institution, has achieved a significant milestone by receiving a national long-term credit rating of ‘AAA (uga)’ with a stable outlook from Fitch Ratings, a globally renowned international credit rating agency. This prestigious rating represents the highest attainable creditworthiness on Uganda’s national scale and underlines the bank’s robust institutional health and overall sustainability.
The credit rating agency, Fitch Ratings, conducted a comprehensive evaluation of UDB against a common set of parameters to assess its creditworthiness and financial stability. Additionally, UDB has been assigned a long-term Issuer Default Rating (IDR) of B+ with a negative outlook, which aligns with Uganda’s sovereign rating since the bank is wholly owned by the government.
Patricia Ojangole, the Managing Director of UDB, expressed her gratitude to various stakeholders, especially the Ugandan government, for their unwavering support, enabling the bank to fulfill its mandate and contribute to the country’s economic growth.
UDB’s mission revolves around providing funding and support to strategically important sectors of the economy, including agriculture, agro-processing, and manufacturing. It primarily relies on shareholder equity and government-guaranteed, low-priced borrowings to fund its initiatives, particularly in sectors that are underserved by other financial institutions.
The ‘AAA (uga)’ rating holds significant implications for UDB. Firstly, it positions the bank to potentially access funding from multilateral funders at lower interest rates due to its lower risk of default. Secondly, the elevated credit rating allows UDB to attract a wider audience of funders, bolstering its financial capacity and confidence.
Ojangole emphasized that the credit rating plays a crucial role in enabling UDB’s funding partners to gauge the bank’s financial buoyancy and reliability. It serves as a vital tool to attract investors and guide them towards safer investments with the potential for solid returns.
Acknowledging the efforts of the government and the Ministry of Finance, among other stakeholders, Ojangole committed UDB to identify opportunities that positively impact the lives of Ugandans and advance the country’s socio-economic agenda.
With the ‘AAA (uga)’ rating, UDB is poised to leverage its financial strength to support transformative projects that drive economic progress and improve the quality of life for citizens across Uganda.
As investors use credit ratings as a guide for low-risk investments, UDB’s robust rating is expected to bolster investor confidence and contribute to the bank’s success in fostering sustainable development initiatives throughout the nation.
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