Arise, a collaborative partnership between Norfund, FMO and Rabobank, has approved a $50m bridging loan to dfcu Ltd, a development finance institution in Uganda.

Deepak Malik, Arise CEO, said: “The facility was availed on commercially-agreed terms, to enable commencement of the recapitalisation of dfcu Bank in the short term, while complying with regulatory capital thresholds.”

dfcu Bank is a fully owned subsidiary of dfcu Ltd, the public listed entity and is regulated by the Central Bank of Uganda.

dfcu Bank has recently concluded an agreement with the Bank of Uganda to purchase the assets and assume the liabilities of Crane Bank Ltd (CBL), which was in receivership. 

The acquisition of CBL will allow dfcu Bank to diversify it service offerings to its clients and make banking more accessible to the public.

Further, the integration will enhance dfcu Bank’s competitive edge against peers in the retail and Small Medium Enterprise (SME) sector.

Juma Kisaame, Managing Director at dfcu Bank, said: “The acquisition gives us the impetus to achieve our strategic objective of building a robust retail operation with multiple delivery channels whilst consolidating our position as a key player in the SME market segment.” 

“It also supports our goal of promoting financial inclusion in Uganda and we welcome the Arise partnership as a contributor to building a stronger financial sector in Sub-Saharan Africa.”

Malick added that Arise supports the planned expansion of dfcu Bank: “We foresee the integration as a catalyst for creating a strong and efficient Ugandan bank, which will have extensive local representation and scalability of distribution (via branch and digital channels).” 

“This partnership speaks directly to the mandate of Arise, which is to collaborate with local financial service providers (FSPs) in Sub Saharan Africa to boost economic growth through strengthening the banking sector”, he added. 

Arise is committed to developing inclusive financial systems in Africa and partners with sustainable FSPs to strengthen their ability to supply capital and financial services to SMEs, the rural sector and unbanked people.

“Arise is supportive of dfcu Bank’s growth ambitions, which will enable the organisation to improve its market position and efficiencies. In addition, we believe that this transaction is a catalyst for improved returns to all stakeholders,” said Malik.