Make use of the new opportunities given by banks after this quarantine period

By Wanambwa M. Rogers

Kampala, Uganda (RTN) -As the world recovers from the effects of the Coronavirus pandemic, the economic levels of many people is badly off. This means that so many people cannot afford to go about their economic activities "business as usual."

Many cannot service their loans and mortgages timely as usual. Many people's businesses cannot kickoff as they once did.

So what can you do when faced by such circumstances? Approach your bank.

As of January 2020, there were 13 million bank accounts in Uganda with 11,000 banking agents the country. This means that Ugandans actually have access to banks now, more than ever. This statement does not mean that the bank penetration in Uganda is now at its optimum but at least more than ever, accessing bank services has been eased.

In April 2020, Bank of Uganda(BoU) released a Monetary Policy Statement on credit relief as a mitigation to COVID-19 affects. In it, BoU highlighted measures that Commercial Banks, Credit Institutions, and Microfinance Deposit Taking Institutions(MDIs) and thier clients can use to sail through this period.

It talks about financial institutions and commercial banks' clients(borrowers) seeking loan reschedules, credit reliefs, loan tenor extensions, repayment holidays of up to 12 months and so on.  

The prepayment of arrears as a condition for restructuring a credit facility was also suspended for 12 months with effect from April 01, 2020. This basically means that you do not have to have cleared your previous loan to zero to request for another during this period.

If you have a loan in the bank that you are servicing, you can go to the bank and ask for any of the above. What is important now is for Ugandans to actually be made aware that such things exist for them.

As the Ugandan community, we should be able to take advantage of them and to let those that do not know of these opportunities.

This month in the June 2020 Monetary Policy Committee (MPC) meeting, BoU reduced the Central Bank Rate (CBR) by 1 percentage point to 7 percent. This means commercial banks and other financial institutions can now get money on a slightly lower interest rate too. Let's hope their loans become cheaper too.

On another note, the banks give financial advise to their clients in their business endeavors. It is wise to involve them in your day to day activities and investment choices. If you are a customer of the bank, this advice can even be given for free if you ask.

Now, all this information is good for you if you already have a bank account and have been a regular client. However, if you do not have one, you can start by opening up one and growing your portfolio. For those that want to borrow immediately and were not owning accounts prior, you can try credit institutions or MDIs. The catch is that you have to have collateral(omusingo).