The Governor of Bank of Uganda, Professor Emmanuel Tumusiime Mutebile, has today threatened to take retaliatory statutory action on the banking industry over its reluctance to cut interest rates in line with BoU’s cuts on the Central Bank Rate. Since the year began, BoU has cut its benchmark lending rate from 9 percent to a historic low of 7 percent in June. Nonetheless, banks have been reluctant to follow cue. Comparatively average lending rates have fallen by 2.15 percentage points from 19.88 percent at the beginning of the year to just 17.73 percent in April 2020. However in May 2020,…
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1. What does Credit Relief mean? It is a re-organisation of a debt obligation through concessions or accommodations that provide borrowers with some form of relief in how and/or when they meet their debt obligation(s) to lenders. 2. What is the key objective of the Credit Relief Measures issued by the Bank of Uganda? The objective is twofold: (i) To enable borrowers cope with the adverse impact of the COVID-19 pandemic on their ability to repay loans; and (ii) To mitigate the risks faced by lenders that may arise from exposure to borrowers that are affected by the COVID-19 pandemic….
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