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CREDIT DEPARTMENT |
Business Sector
Business sectors will cover the following sub-sectors by definition.
Agricultural loans:
This covers fishing, crop production, purchase of tractors and implements, poultry and diary farming.
- Trade and commerce:
All loans for general merchandise, wholesale and retail trade, petroleum products, beverages and cigarettes etc.
- Manufacturing/Industry:
Loans for provision of working capital and bridging finance to cater for purchase of raw material and spares for manufacturing.
- Transport:
Loan for purchase of motor vehicles, buses, and lorries for rental hire.
- Building & construction:
Bridge financing for contractors and construction firms undertaking large construction projects for reputable companies.
- Mortgage finance:
Loans for completion of houses and construction firms undertaking large projects for reputable companies.
- Services:
Loans to bridge finance, hotels, schools and government departments.
2.3.2 Manufacturing/Industry Sector
Some general line will be recommended for the key industries in Uganda.
- Transportation:
- Buses and Lorries: Financing not exceeding of total cost.
- Repayment not to exceed 2 years.
- Minibuses: exceptional cases due to crowded market
- Wholesale & retail general merchandise:
- Should consider financing specific transactions
- Facilities should not exceed 18 months except in very special cases.
- Financing up to 60% of value for specific transactions or 3 to 6 months supplies
- No retail merchandise financing due to high risk and low profit margin.
- Beer and Soda:
- Financing working capital especially during festive seasons.
- Fuel and Petroleum products:
- Daily banking is required
- Services:
- Consider short - term (90) days financing.
- Mining and Quarrying:
- Consider medium term facilities of not less than 12 months.
2.3. 3 Salary/Pension earners scheme: This caters for:
- Public servants
- Pensioners
- Any other employees from reputable organisations/school approved by CIB.
Salary earners who are not more than 55 years old, and have been in the same employment for at least a period of 2 ½ years and are having their salaries paid through their accounts held by CIB will benefit from the scheme.
Pension earners with a minimum survivors benefit period that can cover the loan period can also benefit.
fit period that can cover the loan period can also benefit.
Types of facilities:
- Overdrafts / lines of credit:
This will be available to customers who require working capital with a defined repayment program for a period not exceeding 24 months. This will also be available to salary earners for a period not exceeding 24 months. This should constitute about 70% of the credit portfolio.
- Short - term overdrafts /loans:
Up to one year and this will be the type of credit for specific commercial transactions, transport, agricultural loans and services. This should constitute about 20% of the credit portfolio.
- Temporary overdrafts
These are extended mostly to customers with already running facilities but are in need of funds to bridge gaps in their cash flows. These should be repaid in a period of not more than three months within the validity of the running facility and the security held should be sufficient to cover the temporary facility.
- Long - term loans:
Loans exceeding two years should be approved on a very restrictive basis primarily for three sectors namely: Transport, Manufacturing and Building and construction. This should constitute about 10% of the credit portfolio.
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