Government, bankers appeal for foreign rescue

Kampala, Uganda |  THE INDEPENDENT | Uganda’s banking sector is appealing to the global lending community to come to the rescue of Uganda’s economy where the local lenders are finding it hard to reach in the quest to revive the economy. 

The commercial banks admit that some sectors of the economy are too risky to lend to, especially the micro, small and medium enterprises, which unfortunately contribute the most to the economy. The Private Sector has always accused the banks of avoiding lending to them and instead preferring to invest in government assets which are deemed less risky.

Recently, the Uganda Bankers Association Chairman Mathias Katamba said that actually, it’s the private sector with stopped borrowing especially with the onset of the COVID-19, adding that this was a prudent move because it was not the best time to borrow. It is expected that during the time, there is a record increase in non-performing assets as borrowers fail to pay back due to low business.

Now, Speaking at the World Development Finance Forum 2020, Uganda Bankers Association Chief Executive Officer, Wilbroad Owor said there is a great need for international lenders to help out where the local banks are strained or find the business risky.   

An assessment presented by UDB Executive Director, Patricia Ojangole shows that on average, 80 per cent of private sector businesses need financial help like physical cash, debt rescheduling or direct loans to be able to overcome the effects of the pandemic.   

The World Development Finance Forum was hosted virtually by Uganda Development Bank (UDB) together with the Ministry of Finance, and the European Organization for Sustainable Development (EOSD). It focused on delivering tangible and breakthrough results to Development Finance Institutions (DFIs) and their countries, in response to financing the National Development Agenda, the Sustainable Development Goals and the challenges and opportunities emerging from the coronavirus crisis. 

Amongst the key outcomes of the forum was the signing of the joint resolution committing development finance institutions to jointly promote the above objectives, the outcomes of which are critical for every country to successfully achieve inclusive and sustainable growth. 

Finance Minister Matia Kasaija noted that despite the effects of COVID-19, there were some opportunities created for the economies to take advantage of but noted the need for increased mobilization of resources from within and outside the country.  

At the forum, Uganda Development Bank Limited was among the three DFIs from around the globe to be awarded Sustainability Certification in recognition of its commitment to engendering sustainability in its strategy and throughout its operations.  

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