The government has intervened and bailed out Crane Bank with a Shs200 billion stimuli, which will in turn cause stability in the financial sector.
The Crane Bank is one of the four biggest banks in the country, and has enjoyed sound financial management for the 21 years since inception in 1995. During that time the Crane Bank has distinguished itself as a viable ‘indigenous economic entity’, managed to win several accolades and in the process boosting depositor confidence.
It is common knowledge that there is a slump in the economic tide in the country, largely because of unpredictable challenges that include among others the randomness of the weather patterns, which have made investment in agriculture, a key foreign exchange earner, nightmarish.
Also, the war in South Sudan has affected economic growth in Uganda, with cross-border trade almost coming to a standstill. Of course corruption has also affected the growth indicators.
However, it is imperative that government continue to play its role in maintaining micro and macro economic growth by making the necessary interventions like that made in respect to the Crane Bank, as this will help avoid the consequences that would otherwise arise from the bank’s current challenges.
Needless to mention, bailouts are common measures during financially- trying times like depressions, a good example being the bailouts by the US government to distressed financial institutions in 2008 and 2009, while in Uganda the government has previously bailed out businesses like those belonging to local entrepreneur Hassan Bassajjabalaba.