The loan scheme under the Luweero-Ruwenzori programme has been suspended because of the high default rate by borrowers. In the 2010/2011 financial year, the office of the prime minister through the ministry of Luweero Triangle released shillings 160 million to be issued to residents in five sub counties as soft loans to set small scale businesses to boost household incomes.
The sub counties include Butuntumula, Luweero, Kikyusa, Zirobwe and Katikamu. The funds were channeled through the sub county Savings and Credit Cooperatives [SACCOS] and each borrower asked to return 63 percent of the borrowed sum after a period of two years, which elapses on June 2012.
However, reports from the sub counties indicate that with only a few days to the loan recovery period, only about 50 percent of the funds have been recovered. As a result, sub county authorities are threatening to arrest the loan defaulters unless they pay up the money. Johnson Ntonde, Manager Luweero Sub county SACCO says that they disbursed shillings 36 million but they have only recovered 9 million instead of the expected 22 million shillings. .
He says that the borrowers are playing hide and seek with the SACCO official, adding that some of them have never returned a single cent, which has affected the revolving fund. Sam Sserunjogi, the LC 3 chairman Katikamu sub county says that they have only recovered 8 out of the 18 million shillings they disbursed to residents. Sserunjogi says that they have sent out numerous reminders to the loan defaulters but they are not bothered.
He says that they are waiting for the loan recovery deadline to elapse and drag the defaulters to court for action because the matter is beyond their control. Julius Kaggwa, the chairman Kikyusa Sub County says that they disbursed shillings 20 million but have not received back a single coin.
Richard Ale, the coordinator Forum for Women in Democracy (FOWODE) says that they conduct research in Luweero Sub County and found out that many borrowers were not read to return the money. He says that the distribution of the money was politicized making some borrowers think that it is a reward for their support to the National Resistance Army bush war in 1981-1986.
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But some of the borrowers interviewed by URN say that they invested the money in Agriculture but their crops were hit by natural calamities making it hard for them to service their loans. James Mukebeezi, a resident of Zirobwe Sub County says that they lost a lot of properties in bush war but didn’t receive any compensation from government.
He says that he is using the money to redevelop himself and recover from the war loses. Christopher Kyomya, Luweero Chief Administrative Officer says that the office of the prime minister has suspended the disbursement of the funds because of the high default rates.
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Government earmarked shillings 540 billion for the economic recovery of 39 district under the Luweero-Rwenzori Development Program that were affected by National Resistance Army bush war.
