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Uganda Commercial banks readjusting as BOU tightens monetary policy
Monday August 15, 2011
Uganda Commercial banks are readjusting to remain relevant to customers with lending rates rising and the likelihood of loan defaults increasing.
Herbert Zake, the head of corporate affairs at the Standard Chartered Bank, was optimistic that while there may be a reduction in borrowing in the foreseeable future because of Bank of Uganda?s tight monetary policy stance, banks have to find ways of remaining relevant. He said while it is still early, the bank anticipates that by the turn of the year, the squeeze will start to bite.
He said to maintain their connection with the borrowers, banks have to focus on the most lucrative market segments.
?We need to remain close to the customers. This is not the time to run away from them. Where necessary, we will make adjustments to meet their needs,? said Zake. To maintain customer loyalty, the bank has launched Yoola Omudidi campaign in which three Double Cabin Hilux trucks will be given out in three months.
Arthur Kiwanuka, the head of deposit-taking, said the promotion where customers maintain deposits of sh500,000 is also one way of encouraging savings. ?People have participated, but they have ended up leaving their money with us,? said Kiwanuka.
Philip Odera, the Stanbic Bank chief, said at the announcement of a sh53b profit after tax half-year results last week that they would focus on areas that are profitable to reduce the likely impact of inflation. He said the bank would focus on trade financing and extending finance to SMES.
By David Mugabe: The New Vision Newspaper
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