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MPs adopt committee report on movable assets bill

FILE PHOTO: Nzoghu

Kampala, Uganda | THE INDEPENDENT | Members of Parliament have adopted a report by the Legal and Parliamentary Affairs Committee endorsing a bill to facilitate credit for small borrowers and manage the risk of borrowing by the financial sector.

The bill is envisaged to make credit affordable for Ugandans. According to different reports, only 20 percent of Ugandans own land titles, the main collateral required by financial institutions from loan applicants. More than 80 percent of the population is involved in small businesses with movable assets but is excluded from accessing credit due to lack of collateral.

The committee recommended that the bill titled the Movable Assets Bill, tabled by the Justice and Constitutional Affairs Minister Gen Kahinda Otafiire in March 2018, will free up the locked up capital in form of movable assets to be used as security.

Once approved, the bill will provide for the creation and perfection of security interest, rules for determining priority of claims among competing claimants and registration of security interest in movable property by notices and others.

It will also provide for a register of interests in movable property, enforcement of security interests, search of the register and related matters. The Bill allows Uganda Registration Services Bureau (URSB) to work with Financial Sector Deepening Uganda (FSD Uganda), Bank of Uganda and Local banks to set up a formal movable collateral securities registry.

MPs across the political divide have today showed support for the Legal and Parliamentary Affairs Committee report. Kween County MP Lawrence Cherop Mangusho said once passed into law, the bill will be helpful to small entrepreneurs and farmers in need of regular financial support.

Butaleja Woman MP Milly Mugeni said the Bill will help especially women, who are less empowered economically to access financial support by using movable property.

The Speaker of Parliament, Rebecca Kadaga said the bill speaks to more access to financial services and inclusion.

Bukoto East MP Florence Namayanja said although the bill is good, there is need for the Law Reform Commission to sensitize Ugandans about such laws so that they can benefit from them.

William Nzoghu, the Busongora North MP emphasized the need for parliament to weigh in on unregulated interest rate charges by different creditors across the country. He said despite the fact that bill seeks to bring financial services closer to the people by allowing them to use movable property to access credit; there is need to protect them from high interest rates.

He was supported by the Kazo County MP Gordon Tumwine Bafaki, saying there is need for parliament to look into the issue of interest rates on loans offered to Ugandans.

Ngora County MP, David Abala said the Bill will help Uganda partly solve the problem of forgery like counterfeit log books and land titles to secure financial services.

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