Uganda's small and medium sized companies will benefit from a new funding programme by the European Investment Bank (EIB).

The EIB has offered a $35.4 million credit line to Crane Bank for lending to local firms in both local and foreign currency, with maturities of up to 10 years, including grace periods. Under the credit line, existing and new customers of Crane Bank will benefit, and companies operating across a broad range of sectors including manufacturing, food processing, tourism and services are eligible to apply.

The loan facility is the third lending programme in Uganda by EIB to be managed by Crane Bank. It is also part of the institution’s broader support to SME lending by commercial banks in East Africa.

EIB vice president Pim van Ballekom said the new facility builds on a strong track record of supporting private investment across East Africa in close co-operation with leading local financial partners.

“Small business investment is essential to unlock business opportunities and create new jobs. EIB is pleased to continue its long-standing partnership with Crane Bank that enables Ugandan firms to invest in new sectors and flourish,” Mr Ballekom said.

In the previous schemes, EIB lent Crane Bank $3.7 million in 2007 and $15.1 million in 2010. Past lending has supported nearly 1,000 jobs in manufacturing and tourism.

READ: Region’s SMEs to receive $101m in loans

EIB has in the past five years provided over $506.3 million to 26 different institutions in East Africa including commercial banks, development banks and microfinance institutions through SME and microfinance credit lines.

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To strengthen the financial sector in the region, EIB is implementing $6.3 million technical assistance programme to broaden the range of services offered by local banks and help companies to prepare bankable projects.