Equity bank probes staff over ‘possible loan fraud’
People line up to withdraw money at an Equity Bank ATM in Kabalagala along Ggaba road, Kampala recently. PHOTO/ FILE
What you need to know:
- Dr Fred Muhumuza, a sector expert and also a board member of a bank, told Monitor that in a situation like this, depositors’ savings is not affected except the bank’s bottom line – profit.
Equity Bank Uganda Ltd is investigating some of its staff over possible fraudulent activities affecting its stock loan and agent float financing, Monitor has established.
Stock finance is one of the bank’s portfolio under which lending to customers looking to purchase stocks such as soda, beer, cement, airtime, fuel and beauty products, among others, is effected. While agent loan financing is a particular type of a loan for bank agents and mobile money agents.
This publication understands that the portfolio currently under investigation is approximately Shs65 billion out of a loan book of Shs1.9 trillion and equivalent of nearly 2 per cent of Equity Bank of Uganda total assets.
“We regret to inform you that we have recently identified a possible fraud on our stock loan and agent financing products,” reads part of the bank’s statement addressed to its customers and shareholders.
“People of interest, including a few of our staff and customers, are currently assisting with investigations by the relevant law enforcement authorities.
“We hold ourselves to the highest standards of accountability and transparency, and person found to be responsible, whether through fraud or errors of commission or omission will be fully addressed in accordance with the policies, procedures and ethical values of the organisation and, where appropriate, the laws of the country,” further reads the bank’s statement, a copy of which Monitor has seen.
The bank, however, says its operations continue seamlessly.
“Customers continue to access loans across all our branches countrywide and banking channels.
“The Board of Directors and management are committed to resolving and concluding this matter, and we continue to focus on our purpose of transforming lives, giving dignity and expanding opportunities for wealth creation,” adds the bank.
Meanwhile, Dr Fred Muhumuza, a sector expert and also a board member of a bank, told Monitor that in a situation like this, depositors’ savings is not affected except the bank’s bottom line – profit.
“If it turned out that some money has been lost, it will be the bank to suffer the loss and not the depositors because it is a lapse in the bank’s side,” says Dr Muhumuza, adding that, “until then there shouldn’t be cause for alarm because it’s an investigation into a suspected fraud – still early days.”
The director research and policy at Bank of Uganda, Dr Adam Mugume, said: “We are not aware of this possible fraud.
“But the Audited accounts of the bank as of December were quite healthy. And the loan book was good. Will find out more but I doubt whether this wasn't malicious reporting.”
Equity bank Uganda a subsidiary of Equity group holdings Plc, is one of the leading banks in Uganda wit5h an asset base of 3.5 Trillion as at 30th September 2023. The Bank has continued to expand its footprints and currently has a network of 50 branches, Over 9000 Qui Duka agent and 58ATMs spread across the country and serving over 2 million customers.
