Elizabeth Mbekeka works as a supervisor in a top city bank where she has been working for the last six years. Her husband is a business man who owns a garment shop at Skylight Arcade in Kampala.
Mbekeka says her husband spent all his capital looking after his family, friends and siblings during the lockdown and now needs money to inject in the business. Instead of going to a financial institution, he expects his wife to lend him the money. While she might consider lending him the money, her husband’s refusal to formalize the process has made her reluctant.
“He wants me to lend him money after trying elsewhere and he failed. He is eyeing my hard earned savings without following proper procedures. I suggested that we state my lending terms such as acquiring a certain percentage in the business but he refused,” she explains.
Beatrice Nyangoma says spousal lending would be a good option if the parties took it seriously and did not abuse the trust and misuse the money.
“In a financially struggling society , mutual consent would be a good approach to loans and it would make sense if a spouse could come to the rescue of the other but in many cases people misuse that trust and default,” she explains.
She adds that much as a couple should help one another, it would not make economic sense to lend money for nonprofit making ventures or without committing to a payment plan.
Human rights activist and lawyer Milly Nnassolo Kikomeko observes lending money to family is a complicated matter which should be handled with care.
“Spouses ought to trust each other with everything, and they should be willing to complete each other in all forms including financial needs. Once you feel the need for an extra agreement when it comes to financial matters, it makes the marriage more of a contractual relationship than a till-death do us part arrangement all together,” she explains.
She adds that if the two parties wish to differ, it should be a mutual agreement, put in writing and all terms and conditions involved agreed upon by both parties, and both should undertake to respect the agreement.
Nnassolo advises that among the clauses to be included in the agreement is the mode of dispute resolution in case of a default. “This can be involving an independent mediator or court if so desired, but in any case all these are not necessary if there is utmost trust and oneness between spouses,” she adds.
Makerere University Economist and Knowledge Management Officer Richard Ssempala notes that although most people have visions say for starting up businesses, many are constrained with finding the required measures and tactics of raising financial capital. Often, people look out to their banks, saving groups, relatives and friends. In some cases, spouses lend to each other to start a business.
He however, warns that just like with other sources of financial capital, still borrowing from a spouse comes with some risks that can go as far as interference with marriage in case one fails to payback.
“ Such issues are curtailed by social shortfalls say marriage breakdown and other matters like coming up with the interest rates one has to pay and the duration for the loan and certainty of repayment of the money according to the set targets,” Ssempala
Could it lead to domestic violence?
According to the recent Uganda Police Crime report, a total of 4,718 cases of homicide were reported to Police by the end of 2019 giving a 4.9% increase.
The report indicates that among the many motives behind such killings include family misunderstandings, business rivalry that is usually ignited by incidences like money defaulting among spouses.
Annet Naturyebwa a resident of Buziga revealed that she was nearly strangled by her ex-husband when she demanded that he pay money she had lent him for a year.
“He asked me to lend him money and I clearly told him that the money belonged to my brother and he promised that he would pay it back in a week and when I demanded for it, it marked the beginning of violence against me,” she adds
Nassolo warns that women and men in relationships have been subjected to violence which is sparked by money and property. She notes that some people tend to give in collateral and at the end of the day when the lending party choses to sell the collateral to cover the debt, violence ensues.
Milly Nnassolo advises that there are no clear legal guidelines in Uganda that guide individual money lending or borrowing though it is not an excuse to obtain money from anyone with false pretence.
She adds that as per the laws governing the country under the Money Lender’s Act, no one is supposed to lend money without a valid license but if you lend money to your spouse you can go to court in case they refuse to honour the debt although it may be difficult to prove his case.
“Marriage things can be tricky when it comes to lending and borrowing and so the court would have to look into a lot of detail before coming up with a decision regarding the issue,” the lawyer observes.
Some of the matter that will be considered in case of this kind include; the lending and borrowing terms, circumstances that may have led to the borrowing of the money and for what use was the money that was borrowed, among others.