Junior Finance Minister David Bahati yesterday urged Commercial Banks in Uganda to endeavor to lower their interest rates since Bank of Uganda has done everything possible to make this possible.
Bahati said while government recognizes the numerous risks that commercial banks have to take care of, it is still concerned about the abnormal interest rates charged on customers.
“The Central Bank has continued to lower the lending rates, but we don’t see a response from the commercial banks,” Bahati said.
While officiating at the launch of the new Bank of Africa Elite Banking and Mortgage Financing product, the minister said government might be compelled take stern measures against the adamant commercial banks.
“When I was still a back-bencher in parliament, I had started drafting a bill to cap the interest rates, the way Kenyans have done. But when I was appointed as minister I abandoned that idea; but it appears you want to force government to do that,” he said.
“We encourage you to continue bringing the rates down so that your clients can borrow money, invest and make profit.”
Under the Elite Banking and Mortgage Financing product which was commissioned at Serena Hotel last night, Bank of Africa customers will be enjoying a wide range of first class, tailor-made banking services.
Bank of Africa’s Business Development Manager Ronald Kamulegeya, said the new product is a premium service that will offer an exclusive way of banking, that entails quality in service delivery, convenience, a comfortable and exclusive private banking lobby for customers and lifestyle solutions, all at a competitive price.
“Some of the benefits of Elite banking include longer banking hours per customer, customers will be provided with dedicated relationship managers that will handle their day to day transactions and we will also cater for their unexpected emergencies,” he said.
Under the mortgage financing product, Kamulegeya said the bank will be offering 100% financing for mortgages, which is unique.
“The product has also been enhanced to offer up to Shs 1billion.”
Bank of Africa Executive Director Bernard Magulu said, “We want to create an avenue that allows the ordinary citizen that gone had gone through sweat to gain a home. This applies for those in employment communities and those that are not but under trade and commerce.”
On his part, Minister Bahati thanked the bank for introducing the new product which he said will go a long way in addressing the housing gap that continued to afflict Kampala City.
“We still have a shortage of houses in the city, of about 600000 houses,” noted the minister.
“One of the reasons people are not building is because of lack of access to mortgage facilities. This product is a solution to bridge the gap in the city and in the country.”