Friday , March 29 2024
Home / NEWS / Village banks in Mbale struggling to recover loans

Village banks in Mbale struggling to recover loans

Kampala, Uganda | THE INDEPENDENT | The COVID-19 lockdown has affected the operations of village saving groups in Mbale district as members are failing to repay loans advanced to them.

The banks give out loans to especially subscribed members who operate petty businesses and farming. The loans usually range from 300,000 shillings to 3 million shillings.

Bashir Manana, the chairperson of Namanyonyi Savings and Credit Association in Namayonyi sub county says that they gave out 12 million shillings to the members but they are yet to recover the money.

Aisha Nagudi, the manager of Namanyonyi Savings and Credit Association in Namayonyi sub-county says that the association with 750 members is facing difficulties to operate in the lockdown due to failure by its members to repay the loans.

Nagudi says they have since halted lending out money to members and are now focused on recovering the loans.

“The Covid-19 has caused panic among our members, whoever comes in is only coming to make withdraws, this ideally means that as a bank, we may run out of business because we only operate if we have savings which we do not have at this time,” she said adding that they have even laid off some of their staff due to lack of money to pay them.

Samuel Bonyo, the general secretary of the SACCO says that they are waiting for the end of the lockdown and then call a meeting with their members to devise means of how they can repay the loans.

Mirabu Birungi, the chairperson of Kwiyete Savings Association in Nakaloke town council says that before the lockdown, they had given out more than five million shillings which the members are yet to repay.

Isa Ssekanyo, the Dean of Faculty of Arts and Social Sciences at the Islamic University in Uganda and a lecturer of Economics says that the saving groups are among the sectors which have been hit hard by the Covid-19 pandemic as members cannot fulfill their loan obligations and savings.

He says that the managers of the SACCOs should indefinitely suspend major operations especially extending loans to the members. He adds that the government should put in place measures of helping village banks by giving them loans.

******

URN

Leave a Reply

Your email address will not be published. Required fields are marked *