Stanbic Bank raises borrowing ceiling for cooperatives at lowest rates

November 20, 2024 in Finance, Financial Services by Editor

Karuhanga said statistics show that all banks in Uganda only serve five million people yet the SACCOs serve close to close to 20 million people which means the move will contribute positively to the social-economic transformation of the unbankable community.

Stanbic Bank Uganda has announced an increase in its unsecured loan offering to Savings and Credit Cooperative Organizations (SACCOs) from UGX200 million (nearly $55,000) to UGX4 billion ($1 million) at an interest rate of 10%, which is eight points below the lowest current lending rates.

Francis Karuhanga, the Chief Executive of Stanbic Holdings Uganda Limited (SUHL) said the decision to improve the SACCO preposition is a strategic response to the feedback gained from the previous engagements with cooperative leaders across the country and the growing demand for affordable financial solutions. The bank is the anchor subsidiary of SUHL.

“In line with our purpose; ‘Uganda is our home, we drive her growth’, we believe that by doing this we are not only creating opportunities for our customers, but also transforming the lives of people who we cannot reach as a bank. Statistics show that all banks in Uganda only serve five million people yet the Savings and Credit Cooperative Organizations serve close to close to 20 million people. Therefore it’s paramount for us as the leading drivers of Uganda’s economic development to provide access to inclusive and affordable financing solutions,” Karuhanga said.

He said the increased loan limit is expected to empower SACCO groups, especially those led by women and youth providing them with greater financial resources to invest in their enterprises, improve operations, and contribute positively to the social-economic transformation of the unbankable community.

James Junguru, the Stanbic Manager handling SACCOs said the new UGX4 billion ceiling allows for significant enhancements in loan distributions, facilitating larger projects and financial turnaround for these cooperative societies. This plays a vital role in the livelihoods of many Ugandans. However, for SACCOs to access this financing, they are required have been in operation for at least three years, with audited books of account and credible leadership.

“Stanbic bank has already disbursed over UGX200 billion and is currently undertaking comprehensive support and resources to help SACCO members understand the new opportunities available to them. These offers include investment alternatives like treasury bills and unit trusts through our sister company SBG Securities, affordable insurance packages for their loans and assets, and an opportunity to integrate their systems into our FlexiPay platform which simplifies collections, distribution, and managing records among others,” Junguru said.

Uganda boasts of 33,000 SACCO groups, including those arising from implementation of the Parish Development Model,  a flagship government programme intended to get nearly 40 pc of the population, now in the subsistence economy, into the money economy within five years..