Flavia Nalubega
17 December 2011
Borrowers have been cautioned to maintain a closely knitted relationship with their banks, if they are to survive the hard times characterised by high lending rates and runaway inflation.
Speaking during a Centenary Bank savings promotional campaign, Mr Fabian Kasi, the bank’s managing director said: “Given the current economic situation, financial institutions are increasingly becoming selective especially on new borrowers.”
Thus, he said: “Borrowers must have a good history with a particular financial institution so as to be given a loan.”
Banks have been increasing their lending rates from mid this year coming on the back of high inflation and the central bank’s tough monetary policy that sought to curb the increasingly soaring inflation.
Speaking in a phone interview, Mr Daniel Nsimbambi, the Stanbic Bank communications manager said: “The current economic stress calls for cooperation.”
This comes at a time when traders have raised concern over high lending rates that have crippled the operations as they struggle to high returns on loans.
Addressing journalists in Kampala on Wednesday Kampala City Traders Association (Kacita) threatened to boycott commercial banks, particularly borrowing from them if they do not reduce their interest rates and related charges.
Mr Everest Kayondo, the Kacita chairman said at a press conference that commercial banks must immediately reduce interest charges to manageable rates.
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