Long term loans are project loans that are intended for projects of long-term nature and with long repayment periods. Long term project loans must come with a detailed implementation schedule, which should not exceed 24 months from initial disbursement date.

Purpose:
Provision of long-term loans to finance acquisition, construction, expansion, modernization and installation of fixed assets.

Qualifying Sectors/Businesses:
Key growth sectors of Uganda’s economy with emphasis on capital development in sectors such as primary agriculture & fisheries, forestry, agro-processing, education & social services, health, oil & gas, infrastructure, manufacturing, construction & real estate, hotel, tourism & hospitality and extractive industries amongst others.

Tenure:
The duration for long-term loans stretches for a period from 5-10 years from initial disbursement date, depending on the nature of the project and the estimated implementation completion time and the resultant cash flows.

Grace Period:
The grace period for long-term loans ranges from 3 months to 24 months, depending on the implementation schedule, project cash flow pattern and project unique circumstances.

Interest Rate:
The Bank’s UGX reference (prime) interest rate per annum for long-term loans is 12.5% plus the risk premium determined by the Bank’s interest rate model. The USD reference rate is at 6.5% plus a risk premium per annum.

Appraisal Fees:
Appraisal fee for long-term loans is 2% of the value of the loan with the maximum capped at 100m.

Collateral/ Security:
Long-term loans will be fully secured preferably by a mortgage over immovable assets, chattels mortgage and preferably the project site. The minimum security forced sale cover should be 120% of loan amount. Corporate and Personal guarantees of the proprietors are also required.

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