Banking Sector Laws Should Be Revised, Weak Laws Endengering Local Ugandans-Tycoon Hamis Kigundu Speaks Out

Banking Sector Laws Should Be Revised, Weak Laws Endengering Local Ugandans-Tycoon Hamis Kigundu Speaks Out

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By Spy Uganda

Kampala: City business tycoon, Hamis Kiggundu, the Chief Executive Officer of Ham Enterprises (U) Ltd has come out in a bold way to highlight the major challenges affecting the development of banking sector in Uganda,something he says has led to snail-development of Uganda’s economy.

In a video clip shared on different social media platforms, the youthful city mogul called on Ugandans who are concentrating on minor things like drama, comedy, entertainment, cheap politics etc,to refresh their mindset and look at big things like banking structures, systems and policies, since these are the fundamental pillars of economic development, just like it is in the developed  western world.

Business man says that the biggest problem in Uganda is that people haven’t noticed or are voluntarily not willing to attend to, is the weakest and staggering banking sector which he says can be solved by banking reforms instead of being controlled by the ones, the colonialists left Uganda with.

“Uganda’s banking sector needs banking reforms If this country is to take off, even though we are told that in 1962 we got independence, the reality remains that we lack economic independence” Hamis said.

The money mogul added that in every country, they respect money since it controls development, meaning that if Uganda continues to have no control on its money, it is still a dream for it to prosper economically.

“Uganda banking sector has a lot of challenges including weak structures and system of governance therefore, that is the reason for its snail development. Hamis said.

Kigundu added that if it is observed carefully, it will be found that most banks in Uganda are owned and controlled by foreigners which becomes a challenge since they milk money from poor Ugandans and export it to their home countries for development leaving Uganda nursing economic wounds.

“It’s so sad that foreigners are our economic and banking system decision makers, yet they are not part of our economic problems and this becomes a barrier for Ugandans when ever they are looking for solutions to end those economic challenges.

Mr, Hamis adds that, most banks In Uganda employ foreigners to take up the top management seats, yet every day, government convinces Ugandans that the nation has the best education system, meaning the country has qualified accountants, financiers, cashiers etc. “Should we think that our children whom we have educated are not fit for those big jobs occupied by foreigners? How comes that a bank can be in Uganda for 75 yrs but has never been managed by a Ugandan?” he asks.

“The truth is if we have bank managers who are Ugandans, even our people will find it easy to access bank services, since some of them are illiterate and face foreign language barriers of communication” he added.

For the above reasons, Mr.Kigundu urged government and stakeholders to make sure that at least Ugandans can be shareholders in the foreign banks since they will contribute to their country’s development.

Thirdly, Kigundu says that out of his experience in banking, banks governed by foreigners are so discriminatory in away that they offer loans to foreigners at an interest rate of 16% , but charge Ugandans an interest rate of 23%.

Kigundu further says that when foreign banks are giving out loans they give fellow foreigners much money compared to Ugandans, meaning that Ugandans will keep borrowing petties to build small enterprises instead of building factories, agro-processing industries and other big investments that can boost Uganda’s economic status.

“These bank owners when they are coming, they come as investors yet they come with very small capital which they deposit with BoU as a requirement, the remaining balance they use it for robust advertisement that attract Ugandans to start making deposits and savings which is used by foreigners as a core base of their operational capital. Unfortunately, when a Ugandan goes for a loan, they will give him half of what he wanted, such that they limit your development and your country’s economy not to grow bigger than theirs” Hamis said.

Kigundu adds that another challenge affecting Ugandan Banking Sector is the way banks confiscate peoples’ properties. After a person has signed a contract with the bank for a loan of 5 years to finish his building that was on standstill, he spends three years paying the loan in installments, when that person meets some unpredictable challenges e.g COVID-19, and default payment for three months, the bank confiscates his properties with the capital they found him with.

“Now the question remains what about the other installments i have been paying for three years?, or what about my capital you found me with?, why doesn’t the bank take the amount it gave me and leave my capital such that i can start on that?. And this has affected many Ugandans who have ended up going back to villages while the banks keep growing. That answers the question why most people who borrow from banks end up becoming poor. ” Kigundu said.

He adds that unfortunately, when a person tries to seek justice from courts of law as the last resort to secure his properties, because of the weak judicial system of Uganda mostly on issues regarding banking laws and regulations, which is supported by the so called regulation 13 which states that who ever wants to take a bank to court, must first deposit 30% of the money in contention, a person ends up failing to secure justice and his properties.

“It is so sad that some one has gone to court crying for justice over his confiscated properties, the court tells him that for court to listen to his/her case, they must first pay 30% of what the bank is demanding! That is unfair and totally contradictory to article 28 of the constitution of Uganda which gives right to fair hearing.” Kigundu said.

“The weak system of judiciary has also been an agent in confiscating people’s properties by banks. Using my case as an example, I went to court demanding to be paid my shs120 billion from DTB bank and court told me to first pay 30% which i rejected because I know laws, and finally after I resisted, they ended up saying it’s ok since you are Ham. But what about others?that shows how our banking sector is weak which becomes a danger to our country” he said.

 

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