Over 10, 000 Pride Microfinance customers to lose their money
Jun 26, 2013
A total of 13,810 Pride Microfinance Bank MDI customers risk losing their money as their accounts have been declared dormant. The accounts are said to have been dormant for three years.
By Benon Tugumisirize and Mayimunah Namulemo
A total of 13,810 Pride Microfinance Bank MDI customers risk losing their money as their accounts have been declared dormant. The accounts are said to have been dormant for three years.
The head of corporate affairs at the bank, Deo Kateizi said if the clients do not reactivate their accounts, all their money is to be transferred to the Central Bank which might make it difficult for them to access it.
According to section 83 of the MDI act, 2003, if an account remains dormant for two years, it is flagged as a dormant account and then published in the papers in the third year before the money is transferred to the Central bank after five years.
Kateizi said it is costly for a financial institution to maintain such accounts. “The financial institution does not make any profits if an account remains dormant for all those years.
It becomes costly for us as the banking institution to run, maintain, and calling the accounts holders to reactivate their accounts since we incur money in the process” he added.
He said even when the cost of advertising in the papers is borne by the account holders; the institution would still wish to have them as their customers.
He attributed the dormancy to new technologies in the banking sector that are easily accessible by the clients.
The new technologies include internet banking and Mobile money among others, which the bank has got at the moment. “Some of the accounts’ holders used them to acquire loans and they abandoned their accounts after getting the money,” he explains.
The bank also intends to massively explore new innovative products including E-commerce among others.
After realizing the 2011 financial performance, Pride Microfinance limited MDI ran an advertisement in this newspaper calling upon the 13,810 accounts holders that have been dormant for the last five years to reactivate them.
Kateizi said in 2011, profit after tax increased by 133percent from sh2.84bn to sh6.63bn. The net loans and advances increased by 21percent from sh58.6bn to sh71bn.
The total assets increased by 21percent from sh79.61bn to sh96.3bn.
He said this impressive performance and phenomenal growth in the profit after tax did not happen by accident, saying they would even have done better if the accounts were active.
Kateizi said their customers’ money can be reclaimed straight from the Central bank if they prove right ownership.