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Bail out will not work – senior banker

By Vision Reporter

Added 23rd September 2016 01:05 PM

Mweheire pointed out the different challenges facing the banking sector such as insufficient cash flows.

The Stanbic Bank Chief Executive Officer, Patrick Mweheire, has said the bailout that companies are asking for from the government will not work.

“Unless there is an end and success in mind, bailouts cannot work. Bailout is like one step out of a 10-step journey for such businesses,” Mweheire said.

He was speaking to journalists and civil society activists at African Centre for Media Excellence offices in Bunga, Kampala.

Mweheire pointed out the different challenges facing the banking sector such as insufficient cash flows. He also said delayed government payment is the biggest reason for non-performance of credit facilities in banking sector.

Recently over 65 loan-stressed firms lined up for Sh1.3 trillion government bailout.

However, In July, this year, Private Sector Foundation Uganda  (PSFU) chairman Patrick Bitature said the body had not made a list of those who should be bailed out.

“The PSFU board, executive director and the management have not been involved in any way,” Bitature told New Vision.

According to Bank of Uganda (BoU) statistics, the non-performing loans (NPLs) for the first three months of 2016 were the highest for any quarter since December 2003.

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