The company was established by the Government of Uganda (GOU) in 1964 as a development finance company to promote private sector projects in the country. Subsequently, the company has established itself as the prime point of contact for the foreign investors in Uganda. The core of DFCU Group consisted of three finance companies, DFCU Ltd. (term financing arm), DFCU Bank (commercial banking arm) and DFCU Leasing (former Uganda Leasing acquired in 1999). CDC of UK has historically played an active role in DFCU with a majority (60%) control of the company. IFC’s first investment in DFCU dates back to 1984 when IFC took up a 25% shareholding in the company (Inv. No.723). In 1992, IFC had participated in DFCU’s rights issue (Inv. No. 3345). In 2004, IFC and the Government of Uganda have offered a total of 40% stake in the IPO, which turned out to be the most successful IPO in the country’s history, raising more than $10 million. Following the IPO, the shareholding structure of the company has changed to: CDC of UK (through Actis Capital LLP) with 60%; National Social Security Fund (NSSF, a national pension fund) with 10%, Norfund of Norway with 10%; and general public 20%. Today DFCU is a profitable institution with an asset base, net worth, and net income of $160 million, $22 million, and $5 million, respectively.

The project is to provide a multipurpose term loan to DFCU Ltd. (DFCU or the company) of up to $10 million with a maturity of up to 10 years including 3 years grace. Given DFCU’s interest in participating in IFC’s Global Trade Finance facility, an incremental trade line would be made available to the company.

10.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	10.0
Equity

* These investment figures are indicative

DFCU Ltd. is headquartered in Kampala, Uganda. Its banking subsidiary, DFCU Bank has branches in Kampala, Masaka, Lira and Arua in Uganda.

This project is intended to support DFCU to finance medium to long term projects and leases, and its mortgage portfolio. The project will improve and increase access to term finance for SMEs, who are DFCU’s primary client base. DFCU’s entry into the housing finance would assist the growth of the under-developed housing market. IFC plays critical roles as follows: - IFC will help a locally established bank to support its largely SME clients; - IFC will also play a strong role in increasing the availability of term finance to the private sector; and, - IFC will assist the growth of Uganda’s housing market. IFC has played a key institution building role in DFCU prior to its divestment of equity in 2004. The proposed project would enable IFC to continue the pivotal role.

This is a Financial Intermediary (FI) Type 1/Type 2 project according to IFC''s environmental and social review procedure. For IFC''s previous investment in DFCU, the company participated in an IFC environmental workshop. For this subsequent investment, DFCU has committed to participate in another IFC environmental workshop. DFCU will be required to implement and maintain an environmental management system to ensure that relevant operations comply with Ugandan environmental and social standards. Any investment by DFCU in a Category A project will require the prior approval of IFC, and will be required to comply with applicable World Bank Group environmental, health and safety guidelines and IFC safeguard policies. Any investment by DFCU made through IFC''s Global Trade Finance Facility will be required to comply with IFC''s exclusion list. DFCU will be required to submit to IFC annual environmental performance reports.
Location of environmental documents in locally affected community