MPs want fair law on bank lending
Parliament has threatened to pass laws which compel banks to favour local businessmen and place a ceiling on lending rates of donor funds to the private sector.
By Mary Karugaba
Parliament has threatened to pass laws which compel banks to favour local businessmen and place a ceiling on lending rates of donor funds to the private sector.
“We are very concerned about the way commercial banks are giving loans,†Bright Rwamirama,(right) the chairperson of the finance, planning and economic development committee said.
“We have learnt through bank representatives that most foreign loans like Apex Loan only benefit foreign investors. This is not fair for the local investors,†he said.
The MPs said they would draft laws to stop foreign investors from accessing loans without including indigenous investors as shareholders.
Presenting a paper during the Apex Private Sector Loan Scheme workshop at Nile Hotel last week, Steven Magimbi, a representative from Barclays Group said Apex loans had benefited more foreigners than locals.
Magimbi said local investors did not qualify due to lack of entrepreneurship skills and the inability to maintain businesses.
Rwamirama urged the Government to put conditions for these loans in order to benefit the local people.
He said loans were meant for Ugandan investors and therefore foreign investors should come with their own money.
Rwamirama asked commercial banks to stop charging high interest rates on loans given to the Government.
He said Government borrowed Apex Loans at a 1% interest rate and expects individuals to benefit by paying low interest rates.
“Why should Government borrow at 1% and then commercial banks charge the borrower at 18% yet the Bank of Uganda demands that commercial banks should not charge beyond 12%?†he asked.
He said interest rates should be reduced for the money to go to strategic sectors.Ends
Parliament has threatened to pass laws which compel banks to favour local businessmen and place a ceiling on lending rates of donor funds to the private sector.
“We are very concerned about the way commercial banks are giving loans,†Bright Rwamirama,(right) the chairperson of the finance, planning and economic development committee said.
“We have learnt through bank representatives that most foreign loans like Apex Loan only benefit foreign investors. This is not fair for the local investors,†he said.
The MPs said they would draft laws to stop foreign investors from accessing loans without including indigenous investors as shareholders.
Presenting a paper during the Apex Private Sector Loan Scheme workshop at Nile Hotel last week, Steven Magimbi, a representative from Barclays Group said Apex loans had benefited more foreigners than locals.
Magimbi said local investors did not qualify due to lack of entrepreneurship skills and the inability to maintain businesses.
Rwamirama urged the Government to put conditions for these loans in order to benefit the local people.
He said loans were meant for Ugandan investors and therefore foreign investors should come with their own money.
Rwamirama asked commercial banks to stop charging high interest rates on loans given to the Government.
He said Government borrowed Apex Loans at a 1% interest rate and expects individuals to benefit by paying low interest rates.
“Why should Government borrow at 1% and then commercial banks charge the borrower at 18% yet the Bank of Uganda demands that commercial banks should not charge beyond 12%?†he asked.
He said interest rates should be reduced for the money to go to strategic sectors.Ends