Tuesday, February 1st,2022
dfcu Bank offers recovery loans to support SMEs.
dfcu Bank has launched its Small Business Recovery Fund that aims to offer a financial uplift to small businesses that have been adversely impacted by the COVID-19 pandemic. The dfcu recovery fund is part of the bigger industry action spearheaded by Government of Uganda through the Bank of Uganda.
A report by Economic Policy Research Centre (EPRC) indicated that, micro and small businesses experienced a larger decline in businesses activity compared to medium and large firms in Uganda since the on-set of COVID-19.
Announcing the commencement of the fund, Ronald Kasasa, dfcu Bank’s Head of Business Banking said the Bank has been at the forefront of transforming businesses in Uganda by providing affordable and flexible financing solutions. Through the fund, dfcu Bank will provide affordable credit facilities to small businesses that have suffered financial distress arising from the knock-on effects of COVID-19 pandemic. This fund provides the much-needed liquidity to resuscitate such businesses.
“The Covid-19 pandemic has had a heavy impact on Uganda’s micro, small and medium-sized enterprises. Micro, small and medium-sized enterprises (MSMEs) generally had fewer assets, cash reserves and other resources to ride out the storm, making them particularly vulnerable to the crisis. However, it is because of their resilience that we see an opportunity for them survive. To convert those opportunities to reality, there is a need to continue supporting small businesses so that they can get back on track,” he reiterated.
Barrowers can access up to a maximum loan amount of UGX 100 million and will be expected to provide collateral/security for the loan at a discounted interest rate not exceeding 10% per annum. The interest is charged on a ‘reducing balance’ basis.
The loan repayment period is a minimum of 6 months and a maximum of 4 years, which includes a grace period of a maximum of 1 year depending on the nature of the project.
The credit facility is available to small businesses under the following criteria:
“SMEs are at the core of Uganda’s economy; with this initiative, we are focused on bridging the gap between them and financial support which they urgently require to grow and recover,” Kasasa concluded.
To apply for the facility, customers can visit the nearest dfcu Bank Branch or contact their Relationship Manager.