• The Islamic Corporation for the Development of the Private Sector (ICD) provided Uganda Development Bank (UDB) with $30 million, marking its first financing deal in Uganda and East Africa.
• The facility, structured under Islamic finance principles, will expand SME access to credit in key sectors including agriculture, manufacturing, healthcare, and education.
• Uganda projects 8% average GDP growth over the next five years, driven by oil production and infrastructure investments.

The Islamic Corporation for the Development of the Private Sector (ICD), a member of the Islamic Development Bank Group, announced on October 2 it disbursed $30 million to Uganda Development Bank Limited (UDB). The state-owned development finance institution will channel the funds toward small and medium enterprises (SMEs).

ICD said the facility marks its first financing transaction in Uganda and more broadly in East Africa.

The loan is structured under Islamic finance principles, specifically through a long-term Murabaha contract on commodities. The design aims to increase SME access to affordable credit, a critical driver of inclusive and sustainable growth in Uganda.

Authorities expect the funding to generate broad economic impact across priority sectors such as agribusiness, education, fixed asset investments, manufacturing, and healthcare. The program is also expected to support job creation and sustainable development.

The Ugandan government forecasts average GDP growth of 8% over the next five years. The outlook is underpinned by the launch of crude oil production and higher investment in transportation infrastructure and electricity.

According to ICD, the deal facilitates increased partnership opportunities with local financial institutions. The lender highlighted that this financial facility is their inaugural financing effort in Uganda and East Africa, setting the stage for future partnerships.

Uganda Development Bank, which is fully owned by the government, finances SMEs in five priority sectors: agriculture, infrastructure, tourism, manufacturing, and human capital development.

This article was initially published in French by Sandrine Gaingne

Adapted in English by Ange Jason Quenum