Legislators take Shs900m loans as swearing-in enters day two

Mr Rashid Musisi Ssemanda (Right), a Centenary Bank staff, speaks to Rubaga North MP Moses Kasibante on the sidelines of the swearing-in ceremony at Parliament yesterday. PHOTO BY RACHEL MABALA

What you need to know:

Findings. Some MPs in the previous parliaments have been getting zero pay at the end of the month as a result of acquiring loans.

Parliament. The decision by commercial banks to pitch camp at Parliament ahead of the swearing-in of new legislators is paying off after some of them managed to convince the members take loans of up to Shs900 million.
A Member of Parliament has a monthly gross salary of Shs11.18 million. After Pay As You Earn and pension are deducted, he or she is left with Shs6.1 million monthly.

However, this has not stopped some MPs from borrowing huge sums of money from banks. For instance, a source who preferred anonymity because they are not supposed to divulge client information told Daily Monitor that an MP from northern Uganda and another from central Uganda each got a loan of Shs450m from Tropical Bank at a 20 per cent interest rate per annum.
By last evening, Tropical Bank had signed up 11 legislators, although it was not clear if all the 11 had applied for loans or had merely opened savings or current accounts.
When asked if he had already sought a bank loan, Aruu County MP Odonga Otto said he is not interested in loans.

“There is no way you can get 80 per cent of your pay on the first day of work. That is very risky business,” Mr Otto said.
Besides Tropical Bank, the others that pitched camp at Parliament’s South Wing Parking Yard are Centenary Bank, Post Bank, Orient Bank, Standard Chartered Bank, dfcu Bank and Housing Finance Bank.
Centenary Bank’s loan manager Grace Tugume said they are at Parliament to deliver financial literacy to the new MPs to avoid a scenario where MPs take loans and end up being bankrupt.

“Most of them already signed up in our branches. We are here to help them in financial literacy so that they utilise the loans well for the benefit of their constituencies and themselves,” Ms Tugume said.
Parliament’s director of communication and public affairs Chris Obore said the banks requested the Clerk to Parliament, Ms Jane Kibirige, to allow them to exhibit their products to the new MPs.
“That is how they [banks] came in. However, the Parliamentary Commission has no role in the transactions between any bank and a Member of Parliament; the commission treats the relationship between any bank and any MP as a private matter,” Mr Obore said.

Many members of the 9th Parliament were indebted to either money lenders or commercial banks. It got so bad that at some point, President Museveni reportedly said it was dangerous for Uganda’s legislators to be indebted since some moneyed individuals could take advantage of the them to push through some laws in Parliament.
To ensure that newly–elected NRM MPs do not rush for loans, the President in February met the new MPs and urged them against taking loans.

Some MPs in the previous parliaments have been getting zero pay at the end of the month as a result of acquiring loans. Others would take refuge in Parliament where their immunity is guaranteed for fear of arrest and humiliation by money lenders.
But with the coming into force of the pension law, MPs can now borrow internally and getting loans from banks and money lenders have been discouraged.