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The three institutions, ABC Capital Bank, Guaranty Trust Bank, and Opportunity Bank, now have three months to make the transition. This will include phasing out products and processes that require a tier-one license. The three-month transition period is intended to ensure a smooth service transition for their customers and to mitigate any disruption to financial sector stability.
Three commercial banks in Uganda will transit from Tier I commercial banks to Tier II credit institutions, the Bank of Uganda said. This follows a recent increase in the minimum paid-up share capital requirement for Tier 1 Commercial Banks to UGX 120 billion (approx. US$ 32.26 million) by the end of 2022 and to UGX 150 Billion (approx. US$ 40.32Million) by 30th June 2024.
The three institutions, ABC Capital Bank, Guaranty Trust Bank, and Opportunity Bank, now have three months to make the transition. This will include phasing out products and processes that require a tier-one license. The three-month transition period is intended to ensure a smooth service transition for their customers and to mitigate any disruption to financial sector stability.
Bank of Uganda said the change of status to credit institutions follows decisions by the respective boards of directors, to adopt a strategic shift and reposition the institutions. It noted that the institutions are adequately capitalized and meet the minimum capital requirements for a tier two license.
In June 2023, Guaranty Trust Bank Uganda, which was acquired by GT Bank in 2013, announced its intention to transit from a tier one commercial bank to a tier two credit institution as it had a current paid-up share capital position of UGX 41 billion (approximately USD 11.02 million), a third of what it would require to meet the first capital raise requirements.
ABC Capital Bank started its journey in 1993 as a Micro Finance Institution trading as Capital Finance Corporation Limited (CFC Ltd). ABC Bank (Kenya) made a strategic investment by acquiring a majority shareholding in 2008, kickstarting the process that led to CFCL’s licensing as a commercial bank two years later, and its rebranding.
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Opportunity Bank, which began operations in the mid-1990s as an NGO program called Faulu Uganda, was licensed first as a Tier 2 credit institution until it received its commercial banking license in 2019. It is majority-owned by Luxembourg-based fintech MyBucks Group.
