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Bank of Uganda urges banks to go rural
Publish Date: Mar 07, 2010
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By Emojong Osere

BANKS should consider rolling out services to rural areas to tap into the entrepreneurial potential in upcountry, a top official urged over the weekend.

Louis Kasekende, the central bank deputy governor, who opened Ecobank’s eighth branch in Wandegeya, Kampala, said the future of the economy was dependent on the rural entrepreneurs, who unfortunately wield limited banking knowledge.

“The Bank of Uganda welcomes the enhanced outreach by Ecobank and prays that in the near future, the branch networks should be extended to the rural areas,” he said.

Kasekende said banking institutions had not sufficiently tapped into the countryside population, which predominantly relies on agriculture; a sector that presently employs an estimated 80% of the more than 30 million population.

He reiterated the necessity to cut bank lending rates to encourage borrowing and boost investment.

“Lending rates have generally remained within a range of 16-22%,” he said.

“These rates have hardly changed whereas returns on investment in Treasury Bills and Bonds have all come down to single digits.”
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