BUSINESSMEN in Masaka have opposed the idea that microfinance institutions which give them school fees loans pay the money directly to the schools.
Meeting officials from Faulu Uganda at Hotel Vienna in Masaka municipality, the members of the business community said many of them wanted to borrow money for their childrenâ€™s fees.
However, the business people said they preferred to be given money, which they can distribute to various schools where their children study.
â€œI have three children in different schools. I may wish to borrow that money to pay half of the fees for each of them, instead of you paying the full amount for one of them,â€ said Harriet Naluggwa, a resident of Nyendo suburb.
Henry Semakula of Kyannamukaaka sub-county requested the Faulu officials to extend the grace period before starting to pay back the loans.
However, Peter Makawa, the branches coordinator, rejected the proposal. Makawa said extending the period of grace would make the borrowers pay more money in interest yet Fauluâ€™s aim was to help its members reduce the interest and improve their lives.
He also rejected a proposal by the members who wanted to pay their installments on a monthly basis, saying it would be hard for them to pay.
â€œIf you cannot pay the loan installments every week, then you will not be in position to pay after a month because that money will be too much for you to pay at ago,â€ Makawa said.
Alfred Tumwebaze, the Faulu Uganda deputy chief executive officer, urged members to borrow money they are able to pay back.
â€œWe have seen a number of people failing to settle their loans with an institution and opting to get more loans from other banks. This is not proper. It is better for you to settle one loan before getting another,â€ Tumwebaze said.
Traders, money-lenders disagree