Wednesday June 20 2012

Bank of India urged on agriculture as it resumes operations

By Flavia Nalubega

As government seeks to increase exports particularly from agriculture as laid out in this financial year budget, it has asked for a helping hand from financial institutions.

The sector received Shs585.3 billion in the 2012/13 budget allocation, up from Shs434 billion last year, an amount that is still considered low, given the importance of the sector to the economy.

Finance Minister Maria Kiwanuka, yesterday said that agricultural production and agro-processing are vital sectors for they ensure food security, provide raw materials and enhance export revenue hence need support of other private players, besides government.

“As government seeks to increase exports and revamp household incomes, it is critical that such institutions like Bank of India start operations to render support in such sectors,” Ms Kiwanuka said on Monday.

She was speaking at the re-launch of Bank of India which re-opened in Uganda after a 40-year lull that followed a turbulent political situation in the 1970s.

The re-entry of Bank of India brings the total number of operational commercial banks to 25.

Ms Maria Kiwanuka said the growing number of commercial banks, and the re-entry of BOI is an indication of investors’
confidence in the country’s economy and this will boost private sector business, a move likely to increase local tax collections that the government is eyeing to use in funding 75 per cent of the budget of the 2012/13 financial year.

BOI Uganda Limited Chairman, Peter Kabatsi, said the bank will look into supporting the private sector particularly small enterprises, investing in agriculture, Oil production, Steel production, transport and tourism sectors from which both the government and public will benefit directly. “We will plug into different sectors to offer financial support so that we boost the country’s resource envelope but also support the private sector.”

Bank of Uganda Governor, Tumusime Mutebile, advised the bank to provide improved financial services at an affordable cost to attract the unbanked population.

The bank, whose capital base is about $110 billion, an equivalent of Shs266 trillion, hails from India but has expanded its presence in over 20 countries. In Africa, it is operational in Kenya, Tanzania, Zambia South Africa and Uganda.