EADB Shifts to Local Currency Lending

(KAMPALA) – The East African Development Bank (EADB) has shifted its lending to East African Community (EAC) member states from US dollars to local currencies in a move aimed at boosting growth, reducing loan costs and limiting non-performing loans.

The bank’s strategy involves currency swap agreements to provide borrowers with local currency financing. Initial agreements worth $90 million (SSP 639 billion) were signed with Rwanda and Tanzania, according to EADB’s audited financial statements for 2024.

“A currency swap allows financing at a more favourable rate, with principal exchanged at an agreed rate, interest paid periodically, and the principal returned at the contract’s end,” the lender said.

EADB has faced challenges with loan repayments, writing off $13.03 million (SSP 92.5 billion) in 2023, compared with $140,000 (SSP 1 billion) in 2022. Uganda defaulted on a $1.02 million (SSP 7.2 billion) loan in 2023, while Kenya resumed servicing its loans after a $5.2 million (SSP 36.9 billion) default in 2022.

The bank aims to more than double its balance sheet to $911 million (SSP 6.5 trillion) by 2028, requiring additional financing of $405.14 million (SSP 2.9 trillion). Investments will target agriculture, transport, water, finance, education, industry, energy, healthcare, and climate initiatives. Green and social bonds are also part of EADB’s strategy to meet member states’ financing needs.

To date, EADB has invested $324 million (SSP 2.3 trillion) across its supported sectors, with the largest share—33.9 percent—going to sovereign lending. The least investment has been in agriculture, forestry, and fisheries, at 1.2 percent of total investments, although intermediated financing largely supports agriculture.

In June 2025, EADB signed a $40 million (SSP 284 billion) loan agreement with the Opec Fund for International Development to support small and medium-sized enterprises (SMEs) and strategic infrastructure projects across the bloc. Through the SME Programme, 20 partner financial institutions have accessed lines of credit totalling $99 million (SSP 703 billion), with 20 percent of loans in local currencies.

A total of 11,185 SMEs benefited from these loans, including 3,019 women-owned businesses. An additional 65,167 linked businesses have gained from supply and value chain linkages.

EADB’s net profit for 2024 fell by 14 percent to $11.2 million (SSP 79.5 billion) from $13.05 million (SSP 92.6 billion) in 2023. However, new loan approvals more than doubled to $111.1 million (SSP 789 billion), with disbursements rising 45 percent to $38.2 million (SSP 271 billion).

The bank partners with several financial institutions to expand support to the private sector, especially youth and women-led enterprises in remote areas. In Uganda, loans extended through partner institutions reached $52 million (SSP 369 billion), supporting 12,542 SMEs, including 9,400 women-led enterprises.

EADB, headquartered in Kampala, was established under the 1967 Treaty for East African Cooperation and re-enacted as the Treaty and Charter of the East African Development Bank in 1980. Its current membership includes Uganda, Kenya, Tanzania, and Rwanda. Its authorised share capital is $2.16 billion (SSP 15.3 trillion). In 2024, $53.97 million (SSP 383 billion) of accumulated profits was converted to paid-up share capital, with Rwanda contributing $15.01 million (SSP 107 billion) towards its capital subscription.

Class A shares were distributed as follows: Kenya, Tanzania, Uganda each hold 23.3 percent, and Rwanda 22.09 percent. Class B shareholders include the African Development Bank, SBIC Africa Investment, NCBA Bank Kenya, Nordea Bank Sweden, Standard Chartered Bank London, and Barclays Bank London.

$324 Million Invested Across EAC Development Sectors