Despite Ecobank failing to realize profits five years after its inception in Uganda, the bank is continuously rolling out new products to prove its resilience in hard times and to further make a statement that it is a continental bank and here for life.
Hardly a week after opening its 13th branch in Uganda in Jinja town, 54 kilometers east of the Capital Kampala, the bank during the last week of January 2014, signed a seven year US$ 7 million (Ushs18billion) joint loan agreement to expand access to credit for the private health sector in Uganda.
The line of credit will enable Ecobank offer credit to private health facilities in the country, a move that will help private health facilities get access to affordable lending and in turn, be able to extend high quality medical services.
The line of credit according to Ecobank will be availed to the private health facilities at friendly interest rates ranging between 22.5% onwards depending on the health facility requirements with a grace period of one to three months.
How Stanbic Bank CFO Ronald Makata Blends Governance, Technology and Human Leadership to Drive PerformanceAlthough a drop in the ocean, the facility comes as positive news to prospective investors in the health sector, which although one of the most critical sectors in the economy, has been abandoned by lenders. As of November 2013, lending to the health sector was only Ushs39 billion, a mere 0.005% of the total Ushs8.2trillion credit stock to the private sector.
Most of the money will be for the purchase of medical equipment that will help improve the provision of service delivery. The bank further said businesses that qualify for the loans will be appraised on individual basis.
The line of credit has also a component of technical assistance in form of training in financial management, accounting and cash flow management. The USAID Chief of Party in Uganda , USAID/Private Health Support Programme, Dr. Dithan Kiragga while commenting on the line of credit said, “the initiative started in June 2013 and has a couple of partners including the infectious diseases institute among others. The aim of the initiative is to strengthen the quality of service delivery in the health sector and is based on a Public Private Partnership (PPP).
