The Governor Bank of Uganda Emmanuel Mutebile has slammed a World Bank report that shows that low levels of public trust in financial institutions is hurting the Ugandan economy.
Giving his closing remarks at the launch of the 8th Uganda Economic Update, Mutebile says the central bank has lived to its mandate of protecting the interests of depositors despite cases of distress and bank failures in the last ten years.
The World Bank report also shows that high costs and limited access to credit are constraints to Uganda’s economy.
Although Mutebile admits that commercial banks are making excessive profits, he argues that calls to have lending rates lowered can only be realized in the long term and must be done gradually warning that this will also expose banks to various forms of risk.
According to Mutebile, Uganda’s banking industry has made strides but faces several challenges including poor attitudes towards borrowing, a weak culture of loan repayment, coupled with the fact that many borrowers divert loans to personal use.
He has advised that for the country to develop it will need a much stronger private business sector with good business management and clear separation of biz and personal interests on the part of business owners.