The Netherlands Development Finance Company (FMO) is financing DFCU, a leading financial group in Uganda, with a US$7.5mn loan. With this long-term financing FMO supports in particular DFCU’s activities to promote US dollar-generating private sector enterprises. The facility, the fourth consecutive FMO loan provided to DFCU, strengthens FMO’s relationship with DFCU.

Established as the development finance company of Uganda, DFCU has evolved into one of the leading financial groups in the country serving mostly small and medium enterprises. DFCU is growing rapidly and developing an innovative product base, thereby increasing access to finance in Uganda, claims FMO. With the first three local currency loans FMO has supported DFCU in achieving its current market leadership in both leasing and mortgage/housing financing.

FMO’s portfolio manager Africa Dave Smit comments: “With this fourth loan DFCU gains larger capacity to finance its growth, especially the growth in term loans to foreign currency generating enterprises. The facility will also create stability in DFCU’s balance sheet and is a solid basis for its further ambitions and developments.”

DFCU’s executive director Moses Kibirige adds that US$2.5mn is to go towards financing mortgages while US$5mn will target exporters. “This line of credit is targeting dollar generating enterprises,” he says. “To be eligible, borrowers should have steady US dollar earning businesses and should have been in business for at least a year.”

Among the targeted borrowers are exporters of flowers, cotton, coffee, fish, tea, and honey. Under this line of credit, DFCU will provide long-term finance of five-to-seven years and leases of up to five years.

DFCU Group is one of the fastest growing indigenous financial institutions in Uganda. The group has a broad range of products including commercial banking under DFCU Bank and development finance products including mortgage finance, term lending and leasing under DFCU Ltd.

DFCU Group is the leading provider of leasing and term lending in Uganda, where long-term financing to the corporate and SME market segments is in short supply.