US$15.1m US$10m 1964 Uganda

Building businesses Creating jobs
DFCU Bank
50 years of backing SMEs
Fifty years is not a short time by any means, but
CDC has stuck with DFCU for 50 years. Even
through the difficult times they’ve been with us.
This is very important, for us to have a long-term
shareholder who is committed and dedicated
to the growth of DFCU, and who believes in our
vision and mission in this country.
Juma Kisaame, Managing Director, DFCU Bank
Location
Uganda
CDC investment:
Equity
US$15.1m
US$10m
1964
Subordinated loan
Date of first investment
DFCU
Bank
How CDC’s
investment
supports dfcu
For many companies in Uganda, access to finance is a
key factor holding back growth. A recent jobs study by
the International Finance Corporation (IFC) confirmed
that access to finance is one of the top three limiting
factors for businesses seeking to grow and generate
employment in developing countries.
CDC is the UK’s development finance institution and it
supports the building of businesses throughout Africa and
South Asia, to create jobs and make a lasting difference to
people’s lives in some of the poorest places.
In Uganda, there is a lack of long-term funding available for
small and medium-sized businesses (SMEs). Most of the
funding offered by banks is short-term, but it is long-term
finance which is necessary for the growth of most SMEs.
For the last 50 years DFCU has tried to address this
shortage of finance in Uganda. DFCU has a special focus
on providing SMEs with the long-term funding they need. It
concentrates on providing finance for businesses in certain
sectors, including education, agribusiness, construction
and manufacturing.
DFCU was set up in 1964 by the Government of Uganda and
CDC. In 2000, DFCU started commercial banking through
its subsidiary DFCU Bank. Over the last 50 years, CDC has
been an active investor and provided advice to help the bank
develop and grow. CDC’s investment in DFCU has allowed the
bank to provide the long-term funding to support the SMEs
which are vital to Uganda’s economic development. This has
enabled businesses across a number of sectors to expand,
providing sustainable jobs and an income to hundreds of
thousands of people throughout Uganda.
CDC’s financial support has been coupled with wider support,
for example through corporate governance and technical
assistance. A recent loan of US$10 million from CDC has
helped to further strengthen DFCU Bank’s lending capability.
DFCU is predominantly an SME bank. Our main strength
is in providing long-term funding because there is a real
need, there is a big gap in that area. That is where the
likes of CDC give us the edge, because they think longterm and they also provide us with the money which we
can then use to intermediate.
Juma Kisaame, Managing Director,
DFCU Bank
me
Juma Kisaa
me
Juma Kisaa
How DFCU
creates jobs
Education
Construction
Agribusiness
Victorious Education Services is a
successful business that offers quality
education at an affordable price for a
growing population.
Abubaker Technical Services is a road
building business which competes for
local contracts.
Aponye is an agribusiness which
processes grain for sale in Uganda and
abroad.
When Abubaker first started out in
2006, the company found that bank
terms were difficult for new businesses.
In order to bid for contracts, Abubaker
was required to provide a bank
guarantee. DFCU was the only bank
prepared to provide that guarantee.
When the company started in 2006, it
had two trucks and one small milling
machine. DFCU has financed the
company’s expansion projects including
milling machinery and silos. It now has
35 trucks and improved machinery
which can process 240 tonnes a day,
and the company is a large supplier of
grain to the World Food Programme. As
a result, the business now employs 50
permanent staff and 150 contractors.
It has found a market in Uganda and
wants to expand but has had trouble
finding the money to do so. Set up
in 1999, the school found that banks
would deny its requests for funding, on
the basis that it lacked security.
Victorious turned to DFCU Bank for
help. The bank gave Victorious the
money it was seeking to buy land to
build more schools.
As a result of DFCU’s support,
Victorious has grown from three
members of staff and 30 pupils in 1999
to four campuses, 400 staff and 4,000
pupils today.
The loans that Abubaker has received
from DFCU Bank have helped it to buy
the equipment it needs. In 2010, the
company approached the bank for a
loan, and was leased five machines to
the value of just under US$300,000.
Today the company employs around
600 permanent and contract staff. It
carries out work all over Uganda as well
as in Kenya, and is currently working on
six different road construction projects.
Aponye is expanding into maize meal,
soap and oil refining. These expansion
plans will require more staff, and it
expects to employ another 50 people at
its milling plant.
Apollo Nyega
mehe
Buyondo
Barbara Ophono
Hajji Juma Kalema Kutakulimuuki
DFCU believed in our dream. They
have really been together with us.
We have worked together and we
have managed to educate all these
children in a partnership with DFCU.
Barbara Ophono Buyondo,
Principal, Victorious Education Services
What we have achieved, we have
achieved it because of DFCU. DFCU
has helped my business to grow.
Before going to DFCU we started
with other banks and they were not
matching what we wanted. If DFCU
wasn’t around then we don’t know
what we would’ve done.
Hajji Juma Kalema Kutakulimuuki,
Managing Director, Abubaker Technical Services
Apollo Nyegamehe, Managing Director,
Aponye
cdcgroup.com
About CDC
CDC is the UK’s development finance institution.
Our mission is to support the building of businesses
throughout Africa and South Asia, to create jobs and make
a lasting difference to people’s lives in some of the world’s
poorest places.
Businesses in developing countries often struggle to find the
investment they need to grow. CDC helps meet that need by
providing patient, long-term capital in all its forms.
We aim to invest in countries where the private sector is weak
and jobs are scarce, and in sectors where growth leads
to jobs – directly and indirectly – especially agribusiness,
construction, education, financial institutions, health,
infrastructure and manufacturing.
We apply high-quality commercial investment processes
because development impact is well-correlated with strong
financial performance. This is how our investments make a
lasting difference and demonstrate to others that it is possible
to invest in hard places.
Diana Noble, CEO
As investors, we know that financial
returns are part of business success.
That goes hand-in-hand with
development impact and creating jobs.
As a responsible investor, helping companies achieve good
standards of governance, along with strong environmental
and social policies, is an integral part of how we add value.
Although owned by the UK Government’s Department for
International Development, CDC invests from its own balance
sheet and the profits made from successful long-term
investing are recycled into future investments. In this way,
CDC is able to help more businesses grow and provide jobs.
CDC is a pioneering institution that has been operating in
Africa for over 60 years. Over 1,300 businesses in developing
countries are supported by CDC capital, with over 600 of
these businesses in Africa.
Find out more about our work at www.cdcgroup.com
New investment commitments
1 January - 31 December 2013
US$1005.7m
Workers employed at CDC investee businesses
>1,100,000
New jobs created at CDC investee businesses
2012 – 2013
>68,000
Average annual return
2009 – 2013
5%