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82% of women unaware of loan terms when signing for credit – study
Some of the members of the microfinance project at one of their meetings. Photo | File
What you need to know:
- This lack of understanding leads to devastating consequences, with many women losing their collateral to financial institutions due to ignorance of their rights and responsibilities.
A recent study by the Graca Machel Trust has revealed a shocking 82 per cent of Ugandan women who sign paperwork to access credit from financial institutions are unaware of their obligations.
This lack of understanding leads to devastating consequences, with many women losing their collateral to financial institutions due to ignorance of their rights and responsibilities.
"They do not know about their obligations while signing paperwork for getting a credit from these financial institutions and only come to know about it when their properties are being attached by the creditors after failing to pay," the research reveals.
Dr Theopista Sekitto, Country Director of New Faces New Voices, a women's civil society organization, emphasised the need for a Citizen Financial Protection Centre to safeguard consumers of financial services.
"If established, it will make Ugandans, especially women, know which the right financial institution to get credit from, know their obligations while signing paperwork, and steps undertaken while getting credit," she said
Dr Sekitto, while speaking at a graduation ceremony of 28 women who benefited from Graca Machel Trust mentorship program on Thursday urged the government to act proactively, rather than waiting for disasters to strike.
"What is existing right now only protects financial institutions but leaves out consumers of financial services, which favors the former."
Mr Hillary Emmanuel Musoke, Private Secretary for Wealth Creation to the President, acknowledged the exorbitant 21 per cent interest rate charged by commercial banks, deeming it too high for Ugandans to pay back promptly.
He encouraged women entrepreneurs to seek loans from the Uganda Development Corporation, which offers a more favorable 10 per cent interest rate, courtesy of government funding specifically allocated for women and youth.
Established in 2010 in South Africa, the Graca Machel Trust works to advocate for the protection of children's rights and dignity, influence governance and amplify women's movements by promoting their leadership in the economic, social and political development of Africa.
