Kampala City Traders Association has given all banks an ultimatum of 12 days to reduce their interest rates and return all the money that was charged on their running loans using the new rate. The traders issued the ultimatum on Thursday following a heated meeting at the Diamond Hotel in Kampala.
The meeting drew teachers, members of the business community, teachers, and Uganda Manufacturers Association. It was unanimously agreed that banking institutions are charging exorbitant interest rates from their clients that threatens to wipe out their businesses. Everest Kayonda, KACITA accused the banks of exploiting the society they are expected to work for.
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Paul Musasizi, a businessman operating along Luwumu Street explains that he acquired a loan of shillings 350 million from of the city bank. He however says that under the new rate is expected to return shillings 750 million. Swaleh Kalema, a dealer of solar products say that he acquired a loan from his bank and signed documents that he was expected to return shillings 31 million each months but the money has now been revised to shillings 71 million.
Jackie Namalwa, the marketing Manager Stanbic Bank admits that the interest rates doubled by the close of the year from 15 percent to close to 35. She attributes the increase of the interest rate to rise in Central Bank Rate which has also affected the local banks. Namalwa advises KACITA to engage their bankers and negotiate for a longer repayment period of their loans saying, there is little banks can do now to lower their interest rates.
She insists the banks need the traders just as the traders need the banks. At the same meeting, KACITA also announced plans to stop paying electricity tariffs demanding that government makes public the agreements it signed with UMEME. Issa Ssekito, KACITA spokesman explains that the power problems being experienced in the country originates from the agreements government signed with the power distributors.
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Charlotte Kemigyisha the UMEME corporate communications manager declined to comment about the development saying that she was out of office on leave.
