The Uganda National Chamber of Commerce and Industry (UNCCI), representing the business community in West Nile region, is planning to engage with local banking institutions to advocate for better credit services.
The aim is to boost businesses in the area by providing access to information on available credit facilities and affordable interest rates.
Business owners in the region have expressed frustration over missed opportunities due to a lack of knowledge about the credit services offered by each bank. The resulting economic hardship, exacerbated by the COVID-19 pandemic, has even led to the closure of some businesses.
Mr. Caesar Trinity Draecabo, the interim chairperson of UNCCI, highlighted the challenges faced by businesspeople who are struggling with limited resources to recover from the impact of the pandemic.
He emphasized the need for improved loan options and government support to aid local businesses in West Nile.
During initial discussions with a financial institution in the region, UNCCI discovered an information gap between the business community and the banks. This knowledge deficit has hindered businesses’ ability to make informed decisions about loans and financial support.
“There has been concern that elsewhere around the country, it has been the government move that has helped certain businesses to recover faster. What about West Nile? We need better loans and government to help our businessmen,” Draecabo said.
The economic hardships caused by the pandemic have hit small and medium enterprises particularly hard, leading to closures and ongoing struggles for many businesses.
For example, Mr. Francis Odoi, the owner of Winner Classic Supermarket in Arua City, had to close his supermarket as sales plummeted during the lockdown.
“Before the lockdown, we were getting between Shs1.2b and Shs1.5b in monthly sales. But when the lockdown came, we could not make even Shs500m a month. We could not then afford to pay rent, taxes, workers, utilities like water and electricity. The only option was to close,” he said.
Businessman Mr. Ham Ezama Muzami expressed concerns about the banking sector’s lack of empathy towards struggling businesses. He urged banks to establish better relationships with their clients, especially during difficult economic times.
Mr Ham Ezama Muzami, a businessman in Arua, said: “The business community here has been crying that the banks are not doing good to their businesses, that when someone takes out a loan, there is no sympathy when he delays to repay, they just rush to attach the security.”
In response, Mr. Umaru Hasule, the manager of Stanbic Bank’s Arua branch, emphasized that the bank has solutions to offer. For instance, they can provide unsecured bid bonds of up to Shs3 billion, which could benefit contractors.
Mr. Hasule encouraged businesses to explore these options to ease their financial burdens.
Mr Umaru Hasule, the Stanbic Bank manager, Arua branch, said: “I believe the bank has a solution for them, for instance the pain of bidding, the bank has to hold a fraction of your money. Right now, the bank is saying you can get up to Shs3b unsecured bid bonds. I believe this would be a good one for contractors,” Mr Hasule said.