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Stanbic Bank to extend $100m to critical sectors at special interest rates

Sam Mwogeza is the head, Consumer and High Net Customers at Stanbic Bank Uganda. He spoke to The Independent about the lender’s plan to finance the country’s economic comeback from the pandemic.

You have had a successful first half of the year, judging by your Shs 154.9bn net profit. Does this mean that the pandemic had no effect on your operation?

As a bank, we were quick to devise response initiatives to cushion our individual and business clients as well as to complement the government’s economic recovery measures. A big part of our support really revolved around making cash available to people who needed it in the earliest possible time. We created the ‘Now-Now loan campaign’ which made soft credit instantly available to support businesses and individuals who are looking to get some cash-flow in or to refinance their debt at the lowest cost of as low as 15.9% which created some good moments for us as a business, but most importantly it was being able to respond to customers in their moment of need.

It is good that you continued to make credit available even when the economy was slow; but most people continue to struggle to pay back, especially those servicing old loans given out at high pre-covid19 interest rates. What is your experience?

We know that the most impacted businesses were those that were most dependent on informal income or irregular income. We are a bank that values relationships so what we did was to get even closer to our customers to support them in their moment of need. We widened channels of communication and encouraged our customers to come for support. Some are quicker to recover than others and we gained valuable insights from those that have. We took two approaches—one was to engage clients and give them insights on what we have discovered from other customers engaged in similar businesses. The important outcome of these engagements was to see how, as a bank, do we leave the customer in an improved position or build their resilience. As a result, we restructured customer loans of over Shs840billion across sectors which enabled many businesses remain afloat. We are well into the second half of the year and the pandemic is not showing signs of relenting.

What initiatives do you have in store, to finance Uganda’s private sector comeback from pandemic?

As a bank, our response to tackling the pandemic is centered around identifying meaningful interventions. Among them is our “Enterprise Restart Fund” which is a private sector focused initiative whereby we are identifying the sectors that were most impacted by the pandemic and working out custom solutions to support them. At the heart of the issue is creating and sustaining access to affordable financing for SMEs, SACCOs and village savings local groups that support large masses of people who have been impacted quite significantly.

Is this Enterprise Restart Fund active?

Enterprise Restart Fund has been active for the past few months now and we have already extended low interest credit, worth several dozen billions to targeted groups. Together with strategic partners, we have created a credit line of up to $100million which we are lending to critical sectors of the economy at the most affordable rate, certainly below the current market rates. The target is to create affordable funding to critical sectors and drive strong economic comeback of the private sector, from the pandemic.

This is all exciting and well-meaning but are you also working to make these sectors more efficient and resilient, agile as to remain resilient and pay back these loans?

Indeed, a big part of the challenges faced by companies, entities, or individuals in trying to respond to the Covid-19 pandemic is that they need higher levels of efficiency. For instance, with lengthy lockdowns, how are small businesses leveraging digital channels and solutions to continue serving their customers and expending their reach? Through the Stanbic Bank Business Incubator Limited, we are coaching, mentoring, training, and enhancing the capacity of SMEs to remain resilient, boost efficiency and not only sustain their current workforce but also create new jobs.  We are extending technical assistance to SACCOs and village groups, who are at centre of the economy, in getting access to the knowhow that allows them to embark on a full recovery.

Statistics indicate that more than 18million Ugandans, work and save with SACCOS; the challenge is, during lockdown, most savers withdrew their savings when they were not working and those that had borrowed, failed to pay. So many of the SACCOs are cash-strapped. Is your Enterprise Restart Fund also aimed at addressing this issue?

So far, over 1000 SACCOs have already benefited resulting in a positive knock-on effect involving just over 200,000 Ugandans. Our main agenda is to strengthen the SACCOs, because these are integrated within the communities. They know which individuals need support so it makes it easier.

Your special message to customers?

The discussion now is around how to get more Ugandans to rebuild themselves back, better, and stronger. Our purpose as Stanbic Bank is that Uganda is our home, we drive our growth and we are absolutely committed to this mission.

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