MICROCAPITAL BRIEF: European Investment Bank (EIB) Lends $16.4m to Housing Finance Bank (HFB) to Support Small, Medium-Sized Enterprises (SMEs) in Uganda

The European Investment Bank (EIB), a European Union-sponsored development bank, recently agreed to provide a credit line worth UGX 45 billion (USD 16.4 million) to the Housing Finance Bank (HFB), a Ugandan commercial bank, for on-lending to small and medium-sized enterprises in Uganda. The loan is expected to support SMEs that work within agricultural, tourism and manufacturing industries in the country. EIB also plans to provide technical support to HFB as part of the agreement. This is the second line of credit that EIB has extended to HBF for on-lending to SMEs, the first being a loan of USD 4.3 million in 2010.

As of 2013, HFB had assets of UGX 558 billion (USD 220 million). The total annual lending portfolio of EIB was EUR 71.7 billion (USD 95.8 billion) as of 2013.

By Emily Teleposky, Research Associate

About Housing Finance Bank (HFB):
Housing Finance Bank, regulated by the Bank of Uganda, is a public limited liability company that began within the mortgage business in 1967. HFB became a full commercial bank in 2008. The two main shareholders of HBF are the Ugandan government and the National Social Security Fund, who together own 99.18% of the bank. They have paid up capital on the bank of UGX 61 billion (USD 22 million) as of 2014. As of 2013, HFB has UGX 558 billion (USD 220 million) in assets.

About European Investment Bank (EIB):
The European Investment Bank (EIB) was created in 1958 and serves as the long-term lending bank of the European Union as of 2014. In addition to supporting projects in EU member states, its main priorities include financing investments in likely future member states and EU partner countries, principally in the area of small and medium-sized enterprises (SMEs). According to its website, “the EIB operates on a non-profit maximizing basis and lends at close to the cost of borrowing.” The total annual lending portfolio of EIB was EUR 71.7 billion (USD 95.8 billion) as of 2013.

Additional Sources and Resources:

[1] European Investment Bank, New UGX 45 Billion European support for Ugandan companies with Housing Finance Bank, http://www.eib.europa.eu/infocentre/press/releases/all/2014/2014-237-new-ugx-45-billion-european-support-for-ugandan-companies-with-housing-finance-bank.htm

[2] The East African, EIB to Lend $16.5 Million More to Uganda SMEs, http://www.theeastafrican.co.ke/business/EIB-to-lend–16-5-million-more-to-Uganda-SMEs/-/2560/2502720/-/bg1hv3z/-/index.html

[3] MICROCAPITAL BRIEF: European Investment Bank (EIB) to Loan $12b by 2020 to African, Caribbean, Pacific Countries for Infrastructure, Private Business, Regional Developments, July 25, 2013, https://www.microcapital.org/microcapital-brief-european-investment-bank-eib-to-loan-12b-by-2020-to-african-caribbean-pacific-countries-for-infrastructure-private-business-regional-developments/

[4] MICROCAPITAL BRIEF: European Investment Bank (EIB) Launches $65m East African Community Microfinance Facility, April 6, 2012, https://www.microcapital.org/microcapital-brief-european-investment-bank-eib-launches-65m-east-african-community-microfinance-facility/

[5] MicroCapital Universe Profile, European Investment Bank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Investment+Bank+%28EIB%29

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