The Finance Minister, Matia Kasaija, has urged the East African Development Bank (EADB) to implement strategies that ensure affordable interest rates, enabling businesses to access capital at sustainable costs.
Speaking during a breakfast meeting organized by EADB at Kampala Serena Hotel, Kasaija emphasized the need for the bank to align its financing initiatives with Uganda’s economic development agenda.
He called for a focus on key sectors such as infrastructure, agriculture, manufacturing, and energy, which are critical for long-term growth and national prosperity.
He highlighted the private sector’s role in driving economic growth and job creation, particularly for the youth, and called on the bank to enhance its support for enterprises seeking to expand and invest in productive sectors.
“We need to see more private sector players borrowing,” said Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury at the Finance Ministry. He noted that entities like EADB play a crucial role in supporting the government’s long-term growth strategy under the Agro-Industrialization, Tourism Development, Mineral-Based Industrial Growth (ATMS), and Science, Technology, Innovation, and ICT framework.
Ggoobi stressed that affordable financing is essential for businesses looking to scale operations, enhance productivity, and contribute to economic transformation.
He urged EADB to reassess its interest rate policies and offer more competitive lending terms to attract a broader range of enterprises.
EADB executives revealed that the bank has disbursed over USD 200 million (approx. Shs 734.8 billion) to Kenya, Uganda, Tanzania, and Rwanda over the last five years through its lending operations.
The lender currently caps interest rates between 14-15% per annum, a figure business leaders argue is still high, limiting the ability of small and medium-sized enterprises (SMEs) to secure financing for expansion.
EADB reiterated its commitment to fostering economic growth and supporting regional businesses through tailored financial solutions.
Bank executives assured stakeholders that measures would be explored to enhance credit accessibility, particularly for enterprises in high-priority sectors driving economic transformation.
Experts suggest that lowering interest rates would attract more investors and accelerate industrialization, contributing to job creation and poverty reduction.
Kasaija and Ggoobi urged EADB to explore partnerships with governments and international financial institutions to secure lower-cost financing that can be passed on to businesses at more favorable rates.
