Kampala, Uganda | By Michael Wandati | Uganda’s Finance Minister Matia Kasaija has emphasized the crucial importance of honesty and integrity within money-lending institutions during his address at the inauguration of Goldmine Finance Branch in Kabalagala.
Highlighting a common concern, he underscored the tendency of many banks and money lenders to prioritize loan repayment over the sustainable progress of borrowers’ businesses.
Kasaija pointed out that the pursuit of profit at the expense of borrowers’ welfare has led to the collapse of numerous enterprises, primarily due to exorbitant interest rates imposed by financial institutions.
This issue has not gone unnoticed by regulatory bodies like the Uganda Microfinance Regulatory Authority (UMRA).
Ezra Balihamwe, the compliance officer at UMRA, echoed Kasaija’s sentiments, highlighting ongoing challenges faced by the public, particularly concerning extended loan terms from unregulated financial entities.
He also addressed internal obstacles within UMRA, citing a staff shortage that hampers the Authority’s ability to fully enforce regulations nationwide.
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Allan Tayebwa, Managing Director of Goldmine Finance, emphasized the imperative of enhancing professionalism and financial literacy among both lenders and borrowers.
He stressed the importance of adhering to legal frameworks in conducting financial operations, condemning the prevalence of coercive tactics employed by some lenders during debt recovery processes.
In conclusion, the call for integrity, professionalism, and adherence to legal standards in the lending industry is clear.
Kasaija’s remarks, alongside insights from regulatory officials and industry leaders, emphasize the need for collaborative efforts to foster a more transparent and sustainable financial landscape.
