Kampala – The Uganda Bankers’ Association, the umbrella body consolidates the commercial banks in the country, has squashed businessman Hamis Kiggundu’s call for reform on the banking sector;
This comes after businessman Kiggundu penned down a publication particularly bulldozing commercial banks on the way they conduct business with clients especially issuing out of loans.
The opinion which appeared in one of the local dailies of last week seemed to portray some commercial banks in a bad light with claims of high-interest rates.
UBA Executive Director Wilbrod Humprey Owor revealed it is only citizens with a poor or unfavourable credit record coupled with maligning a sector, especially when in default works against the growth of the credit environment that would devour on the said allegation and that never ever improves the position of the borrowers.
“Citizens with a poor or unfavourable credit record coupled with maligning a sector especially when in default works against the growth of the credit environment and never ever improves the position of the borrowers,” said Owor.
He added: “Instead, it adds a risk premium to the pricing of loans because it puts depositors hard earned money at risk, and makes the good borrowers pay for the deeds of bad borrowers. It also discourages those who would have wished to make available more money to lend and expand the economy since capital is eroded.”
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Commercial banks have recently reached a decision to review lending rates downwards in light of the prevailing circumstances and 20 commercial banks out of the 24 have restructured their rates downwards already as seen below.