Minister of State for Micro Finance addressing different micro finance institution heads at Hotel Africana.
The permanent Secretary for the Ministry of Finance who also doubles as Secretary to the Treasury (PSST) Mr. Ramathan Ggoobi justified why government every financial year introduces new taxes.
While officiating at the workshop aimed discussing issues pertaining Microfinance institutions at Hotel African, Ggoobi said that government needs to reduce borrowing locally so as to reduce competing with individuals and companies getting loans from the same commercial banks.
He said that government is embarking on mobilizing its own revenue from taxes as opposed to looking at borrowing which pushes the interest rate up wards due to the high demand for borrowed capital which causes high competition between the state and the private sector.
Ggoobi also said that a small percentage of individuals accessing money from commercial banks and these make only 14% while from SACCOS constitute also 14% and the majority 64 use Mobile money.
The PSST argued that although the interest rate has reduced from 25% ten years ago to the current 17%, he considers this still very high that attracts slow growth of the economy.
On the issue of government interventions such as Emyoga, Youth livelihood funds not creating a reasonable impact on development and eradicating poverty, he said is attributed to lack of enough information by the individuals about government programs and those who get it don’t have enough expertise say of doing appropriate business plans.
He also cited out another issue where by people lack key aspect of real life learning and finance inclusion like holding at least a bank card.
“Government have now invested in training people through their groups using Enterprise Uganda to equip them with enough knowledge and required skills before they are given money for individual development. It’s also investing National identification, improving land registration systems to make land titles of quality. This will make government programs geared towards alleviation of poverty beneficial to people,’’ Mr. Ggoobi said.
He further said that this will help reduce government appetite for borrowing because it’s expected to increase economic activities which in the end will led to improvement in the tax base thus improvement in tax revenue collections.
The Minister of State for Micro Finance Hon. Haruna Kasolo said that government has so far release a total of UGX 3.7 trillion to SACCOS but still not many people are utilizing them and like the PSST he also attributed this to lack of information to the majority of Ugandans who are supposed to benefit from the various government programs.
He warned financial institutions of just lending to individuals without first property evaluating the eligibility of the borrower something he says has hugely caused loss to such institutions.
“Subject those who ask for loans to proper interview. Make them defend their business proposals and extent credit facilities to those who have passed the test. Encourage them also to embrace routine saving,’’ Hon. Kasolo advised.
He implored all Ugandans to embrace the saving culture however little they earn saying that it will help the get funds for investment as well accessing credit facilities.
“ Every individual ought to start saving for tomorrow. Your wife, children and relatives can abandon you but money will never desert you when you have challenges like sickness.’’ He said.
The Minister also encouraged the citizens to concentrate in area where they have enough expertise and stop being everywhere and also to stop discussing people or politics all the time.