Copy of Low lending rates will boost trade – official

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Banks have been urged to lower interest rates in order to boost lending and spur regional trade. Speaking at the launch of NC Bank, a subsidiary of Kenya’s NIC Bank in Kampala last week, the Kenyan High Commissioner to Uganda, Rtd Major General Geoffrey Okanga said expensive loans have hampered trade among East African member states.

Lending rates across East Africa skyrocketed in the second half of 2011 as regional economies struggled to contain runaway inflation and volatilities in the global markets. Bank of Uganda has since the beginning of this year been lowering key lending rates – the Central Bank Rate, however, commercial banks are still reluctant to move in the same direction citing an unstable shilling, low deposits and financing expensive deposits.

Last week some banks including Stanbic announced cuts reducing rates from 26 per cent to 24 per cent effective September 28. NC bank also said it will lower its lending rates from 27.5 per cent to 23.5 per cent, effective today, while Standard Chartered also cut its rate to 24 per cent.

Bank of Uganda governor, Mr Emmanuel Tumusiime Mutebile said with the increase in competition in the banking sector, individual banks will be forced to offer cheaper credit whilst they are forced out of business.

There are currently 25 banks in the country, following the entry of NC and Bank of India mid-this year.
Mr Mutebile further urged banks to rise up to the challenge of offering a diverse range of financial products and services in a reliable and efficient manner.
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Mr John Okulo, the NC Bank managing director, said the bank will soon rollout a mobile banking platform to allow customers access their bank accounts, check account balances, enquire about forex rates and make cash transfers to and from their mobile money account using their mobile phones. The NIC Bank Group has a total asset portfolio of about $1 billion with a shareholders’ fund of about $140 million.

In 2011, the group reported a profit before tax of $43 million, up from $12 million in 2007.
The group’s 2012 half year profit before tax also rose from $27 million up from $18.8 million in the same period last year.

By Faridah Kulabako  (email the author)

Posted  Monday, September 10  2012

fkulabako@ug.nationmedia.com

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Copy of Low lending rates will boost trade – official

Banks have been urged to lower interest rates in order to boost lending and spur regional trade. Speaking at the launch of NC Bank, a subsidiary of Kenya’s NIC Bank in Kampala last week, the Kenyan High Commissioner to Uganda, Rtd Major General Geoffrey Okanga said expensive loans have hampered trade among East African member states.

Lending rates across East Africa skyrocketed in the second half of 2011 as regional economies struggled to contain runaway inflation and volatilities in the global markets. Bank of Uganda has since the beginning of this year been lowering key lending rates – the Central Bank Rate, however, commercial banks are still reluctant to move in the same direction citing an unstable shilling, low deposits and financing expensive deposits.

Last week some banks including Stanbic announced cuts reducing rates from 26 per cent to 24 per cent effective September 28. NC bank also said it will lower its lending rates from 27.5 per cent to 23.5 per cent, effective today, while Standard Chartered also cut its rate to 24 per cent.

Bank of Uganda governor, Mr Emmanuel Tumusiime Mutebile said with the increase in competition in the banking sector, individual banks will be forced to offer cheaper credit whilst they are forced out of business.

There are currently 25 banks in the country, following the entry of NC and Bank of India mid-this year.
Mr Mutebile further urged banks to rise up to the challenge of offering a diverse range of financial products and services in a reliable and efficient manner.
Share This Story

Mr John Okulo, the NC Bank managing director, said the bank will soon rollout a mobile banking platform to allow customers access their bank accounts, check account balances, enquire about forex rates and make cash transfers to and from their mobile money account using their mobile phones. The NIC Bank Group has a total asset portfolio of about $1 billion with a shareholders’ fund of about $140 million.

In 2011, the group reported a profit before tax of $43 million, up from $12 million in 2007.
The group’s 2012 half year profit before tax also rose from $27 million up from $18.8 million in the same period last year.

By Faridah Kulabako  (email the author)

Posted  Monday, September 10  2012

fkulabako@ug.nationmedia.com

About The Author

Related posts

Leave a Reply

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