Friday December 1 2017

Bureau to stop banks from attaching borrowers’ property



A banker has revealed ongoing discussions that will pave way for the establishment of a Consumer Reference Bureau, premised on availing financial literacy and protecting borrowers from losing property to financial institutions.
Ms Theopista Sekitto Ntale, in an interview, said thousands of Ugandans have lost property to banks owing to the fact that financial institutions do not reveal all details to their clients before signing loan agreements.
“Many people have borrowed and appended their signatures on documents without knowing what they mean. Many have lost property while others have been surprised with eviction orders,”Ms Ntale said last week.
She spoke to Daily Monitor at the sidelines of a women’s conference organised by Uganda Women Entrepreneurs Association Limited (UWEAL) and FACTS, a finance company with operations in Kenya and Uganda.
UN Women and New Faces New Voices, a pan-African advocacy group that focuses on expanding the role of women in financial sector, Ms Ntale said, are behind the talks with government to create a consumer bureau.
“Even before a person loses property, what are the different steps that can be taken? These are the things that we want the bureau to address,” Ms Ntale added blaming the high non-performing loans to borrowers’ inability to understand the loan agreements.
According to Bank of Uganda Monetary Policy Report for February 2016, the ratio of non-performing loans to total loans had increased in December 2016 to 10.5 per cent, up from 7.7 per cent in September 2016.
Currently, it is the role of the central bank to protect consumers from exploitation from banks but Ntale says: “how many Ugandans can access the central bank? How many Ugandans are even aware that it is there?
For banks, there is a credit reference Bureau that protects them from losing money to borrowers through requiring “precise addresses of borrowers such as Plot numbers, street names, and postal addresses” according to information on the Bank of Uganda website.
Ms Connie Kekihembo, the UWEAL executive director said the organisation has availed free space at Uganda Manufacturers Association to help women access financial literacy and mentorship.