Bad Economy: Banks Lower Interest Rates To Entice Borrowers

Bad Economy: Banks Lower Interest Rates To Entice Borrowers

By Serestino Tusingwire

Players within the local financial sector are adjusting their lending rates downwards in some instances by an average spread of nearly 3%, in a move largely aimed at persuading more borrowers. This will be effective 1st April, 2017.

Currently the financial sector holds a credit portfolio of approximately 12 trillion shillings lent out to the public, a figure the lenders are now keen on growing, according to the Uganda Bankers’ Association.

While talking to Ntv, the chairman, Uganda Bankers association, Fabian Kasi, there are certain unavoidable circumstances that force the banks to lower their rates if they are to get customers.

“Of course we hope that the interest rates continue come down, we know that we must work at our costs of operation, we know that we must give out money to people who are able to pay back in time; if those things happen, we should continue to see these rates calm down,” Kazi said.

Stanbic bank has since moved from 20% – 19.5%, Housing Finance bank is at 19.5%, DFCU bank has moved from 22% – 21%, DTB from 24% – 22.5%, Standard Chartered bank is at 21%, and tropical bank is at22.5% from 23.5%.

Since February 2016, Uganda has been in economic turbulence and specialists in finance sector predict that Uganda will not be able to stabilize financially until 2019.