PDM money not against Islamic law, Museveni tells Muslims

President Museveni. PHOTO/FRANK BAGUMA

What you need to know:

  • Museveni viewed that the Islamic teaching is against the huge and unfair interests levied by money lenders.

President Museveni has guided that Shs100million annually given to each parish under government’s Parish Development Model (PDM) program is free from interests or profits, urging Muslims to use it without fear of contravening the Islamic teachings against Riba.

Responding to complaints by Taqwa Islamic Sacco, President Museveni through a Monday letter noted that PDM funds are not loans to the Parish Saccos but a grant.

The Ugandan leader emphasized that the “small interest” percentage is not meant to profit from the grant but to keep the program afloat amidst inflation challenges.

“In my humble view, there is no Riba [interests] in PDM. Why? This is not a loan by Government to the Parish Sacco, it is a grant [and] once the money is "ours" in the Sacco, we face the problem of inflation [in that] when I buy my favorite mug of coffee at Shs20, 000, this year, I may be unable to buy the same cup next year because of the change of prices,” Museveni explained.

“Therefore, when the Sacco puts a percentage of let us say 5 per cent on the Shs1million after 24months on the money it gives to one of the Sacco members, it is to maintain the stability of the Shs20,000 being able to buy me the same mug next calendar year, like it did this year,” he added.

President Museveni further elaborated that “small interests” on the PDM funds enable Saccos to generate operational funds to buy materials like papers needed for the transactions.

 “If the parish Sacco managers pay [operational costs] from the Shs1million, the fund will decrease [and] the government will have to add more money,” he viewed.

Museveni viewed that the Islamic teaching is against the huge and unfair interests levied by money lenders.

“Money lenders have been demanding, I hear, 3 per cent per month Riba [interests]. This is 36 per cent per year. This means that if I take Shs1million, after a year, I will pay Shs1,360,000,” he said

“In the PDM case, if the percentage is 10, I will pay Shs1,100,000 after two years on our own money at the Parish. Why? Not in order to give anybody or any company profit [but] simply to maintain the value of our money,” he wrote. .

Meanwhile, he extended Shs200 million as support to Taqwa Islamic Sacco.