Bank of Uganda has named commercial banks that charged borrowers lowest rates between January and June 2020, effectively making them the cheapest lenders for debtors to run to.
In January 2020, the industry average lending rates were at 20.06 percent and it had dropped to 17.2 percent in June. Citibank had the cheapest rate consistently below 15 percent.
Wilbrod Owor, the Uganda Bankers Association executive director said on Thursday in an online meeting that several issues contributed to the way the banks priced their loans.
These include issues surrounding land where one piece can have more than two titles issued and lengthy court processes as banks try to recover their money. Other factors are the size of the bank, the size of the economy and costs banks incur to stay running.
Owor said the fact that the government also continues to borrow from these banks through treasury bills and bonds. The government is the safest borrower every bank wants to lend to because it can tax and payback.
Here are the commercial banks that have kept their lending rates below industry average in the first six months of the year according to the Bank of Uganda’s monetary policy report for August 2020.
2. Bank of Baroda
3.Bank of India
8.Standard Chartered Bank
9 United Bank of Africa
10. Exim Bank
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