New banks kick off operations amid market volatilities
Posted Friday, June 8 2012 at 00:00
Even as the economy slows to 3.2% banks continue to show interest in Uganda.
NC Bank Uganda has started operations bringing to 25 the number of banks operating in Uganda’s growing but saturated market.
The bank, which boa sts of a portfolio of about Shs30 billion is a fully owned subsidiary of NIC Bank Kenya with headquarters in Nairobi.
Early this year, Bank of Uganda issued three banks including NC Bank and Bank of India with operational licences, a move that is likely to tighten c ompetition in an already crowded banking sector.
Even as Uganda witnesses good growth in its banking sector, penetration has continued to be slow, stagnating at about three million accounts.
According to data from BoU, half of Uganda’s banking assets are controlled by the three top banks with Stanbic Bank owing a quarter of those assets.
Speaking in an interview Mr John Okulo, the NC Bank Uganda managing director, told Daily Monitor that the bank would focus on growing services that promote value addition.
He said: “We are looking at producers at the lowest point of production. We want to grow their capacity through a number of long term services.”
“Our vision”, he added “is to grow with the customer. We are looking at the long term as our core value but focusing on a number of short term services.”
Meanwhile Bank of India will on Monday open its doors to Uganda joining a list of others already in Uganda’s banking sector.
The bank will make a second entry into Uganda after it exited the market in 1972 at the height of a disastrous ‘economic war’.
Speaking in an interview, Mr Rakesh Sehgal, the bank’s managing director, said: “Our focus is on the Small and Medium Enterprises as they are the real engines of growth.”
He said: “We shall reach the unbanked, with realistically low interest rates.”
Uganda’s economic growth has slumped to its lowest in over 20 years slipping to 3.2 per cent amid high inflation, currency depreciation, high interest rates and the generally high cost of doing business.
However, BoU continues to be optimistic about the economy’s recovery, instituting a number of measures to uplift the economy.