TOP
Sunday,August 25,2019 17:58 PM

Heed call for cheaper loans

By Vision Reporter

Added 9th December 2010 03:00 AM

A STRAW poll of voters in Tororo highlights a need for greater access to finance at an affordable rate. The respondents said they needed the money to kick-start their businesses.

A STRAW poll of voters in Tororo highlights a need for greater access to finance at an affordable rate. The respondents said they needed the money to kick-start their businesses.

Among the respondents were vegetable sellers, car washers and small-scale farmers.

If anything, this shows a welcome trend in our politics. People are seeing the Government more as a facilitator of development than an issuer of handouts and they are holding the Government to account for its responsibility.

Issue-based elections do not materialise out of the blue and maybe it can be said that when you have had as many elections as Uganda has had in the last 20 years it was only inevitable that we would come to this.

Having said that, the Government needs to take seriously the issue of high lending rates. The lowering of treasury bill and bond rates and the launching of the credit reference bureau are welcome initiatives but are yet to show significant change in lending rates.

We have come a long way from the days of 50% lending rates but for business loans and mortgages to be priced in double digits is making business survival difficult.

In addition, the Government may consider pushing a determined effort to push up our savings rates by liberalising the pension sector, giving tax relief on mortgages and long term savings. With banks sitting on large piles of cash they will have no choice but to lower lending rates or suffer less than optimal returns on their capital.

And the Government need not compromise the liberalised financial sector or revert to policy reversals to achieve this. But as an indicator of long term stability, the shift towards issue-based politics is welcome and should be supported.


Heed call for cheaper loans

Related Articles

More From The Author

Related articles