All You Need to Know About the UDB SME Kazi Loan

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The Uganda Development Bank (UDB) is dedicated to empowering small and medium enterprises (SMEs) by offering accessible financial solutions to support growth and sustainability.

One of its flagship financial products is the UDB SME Kazi Loan. This initiative provides a much-needed boost to SMEs in Uganda by offering affordable financing with flexible repayment options.

Understanding the UDB SME Kazi Loan

The UDB SME Kazi Loan is a financial product tailored to enable SMEs to access affordable credit for business expansion and sustainability. This loan, with a funding limit of up to UGX 720 million and a repayment tenure of up to six years, provides a solid financial foundation for eligible businesses.

The Uganda Development Bank SME Kazi Loan is structured to promote business resilience by offering funding that can be used for various purposes, including working capital, trade financing, invoice discounting, contract financing, asset acquisition, and business expansion.

Eligibility Criteria for the UDB SME Loan

To qualify for the UDB SME Loan, businesses must meet the following criteria:

Business Type: Sole proprietorships, registered partnerships, cooperatives, associations, or limited companies.
Annual Turnover:
- Small enterprises: Up to UGX 100 million
- Medium enterprises: Up to UGX 360 million
Sectors Covered: Agriculture (including agro-processing), manufacturing, tourism, hospitality, and human capital development (education and health).
Registration: The business must be a registered Ugandan entity, such as a company, cooperative, or farmer group.

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Key Features of the Uganda Development Bank SME Loan

The Uganda Development Bank SME Kazi Loan stands out due to its competitive financial terms and flexible repayment options:

Loan Amount: Ranges from UGX 50 million to UGX 720 million.
Interest Rate: As low as 10–12% per annum, making it one of the most affordable financing options for SMEs.
Repayment Period: Up to six years, with flexible terms depending on business needs.
Grace Period: Up to two years, allowing businesses to generate revenue before starting repayment.
Collateral Options:
- Sales agreements.
- Customary land titles (UDB assists with surveying and titling).
- Hypothecation of purchased assets (e.g., machinery or equipment).

How to Apply for the UDB SME Kazi Loan

To apply for the UDB Kazi Loan, business owners must submit a completed application form along with the following key documents:

A facility application letter on company letterhead, including a board resolution to borrow.
A detailed business plan or feasibility study, complete with cash flow projections.
Audited financial statements for the past three years (if applicable).
Bank and loan statements from the past 12 months.
Environmental Impact Assessment report (where necessary).

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Additional Business Support through the UDB SME Loan

Beyond financial support, the UDB SME Loan also provides business advisory services through the Business Accelerator for Successful Enterprises (BASE) program.

This initiative offers training in financial management, governance, and business best practices, reducing the risk of loan default and enhancing long-term sustainability.