The state for Finance David Bahati and Member of Parliament (Ndorwa West) on Thursday said that back then before he became a minister, he had wanted to draft a private member’s bill aimed at capping commercial bank lending rates in Uganda.
A private member’s bill in a parliamentary system of government is defined as a proposed law introduced into a legislature by a legislator who is not acting on behalf of the executive branch. However, such bill are rarely passed.
“When I was still a back-bencher in parliament, I had started drafting a bill to cap the interest rates, the way Kenyans have done. But when I was appointed as minister I abandoned that idea; but it appears you want to force government to do that,” he said.
Minister Bahati said while officiating at the launch of the new Bank of Africa (BOA) Uganda Elite Banking and Mortgage Financing product at the Kampala Serena Hotel.
“The Central Bank has continued to lower the lending rates, but we don’t see a response from the commercial banks,” Bahati said, adding that government could act in the future.
He said reduce prime lending rates would boost economic activities, further stating that government would soon stop borrowing from the domestic market to allow the private sector players access the credit they require for investment.
“While government recognizes the numerous risks that commercial banks have to take care of, it is still concerned about the abnormal interest rates charged on customers,” he said.
On BOA’s Elite Banking product, Bahati lauded the bank, saying that it was an innovative way of handling business.
BOA’s Business Development Manager Ronald Kamulegeya, said the new product is a premium service meant to offer quality in service delivery, convenience, a comfortable and exclusive private banking hall for customers and lifestyle solutions, all at a competitive price.
“Some of the benefits of Elite banking include longer banking hours per customer, customers will be provided with dedicated relationship managers that will handle their day to day transactions and we will also cater for their unexpected emergencies,” he said.
Clients with the Elite Banking card can present it to the banker’s partners for discounts on purchases. Some of the partners include Elite Digital, Gardenia Spa, Sheraton Kampala Hotel, Kampala Serena Hote, Piato Restaurant, The Lawns and CLB Capital among others.
Under the mortgage financing product, Kamulegeya said the bank will be offering 100 per cent financing for mortgages, to the tune of Shs1billion.”
Minister Bahati commended the bank for introducing the new mortgage financing product which he said would addressed the housing gap that continued to afflict Kampala City.
“We still have a shortage of houses in the city, of about 600000 houses,” he said, stating further that lack of affordable mortgages is one of the reasons why people are not building.
BOA Director Bernard Magulu said, the bank wants ordinary citizens to own a decent homes as well as development units for letting. He said the bank was ready to help citizens achieve lifetime goals.
Those in employment and formal trade can apply for any mortgage which has a longer repayment period of up to 25 years but also carry low interest rates. Applicants can apply for the loan for home purchase, equity release, renovations, construction, completion and land purchase.