The banking sector was urged to educate their financially illiterate clientele.
Bank of Uganda (BoU) has pledged closer co-operation with commercial banks to encourage innovation in the industry, and to improve financial literacy and inclusion.
Speaking on behalf of BoU’s Governor, Prof. Tumusiime Mutebile, at the launch of Opportunity Banks new premises in Kamwokya, a Kampala suburb, Dr. Tumubweine Twinemanzi, the new Executive Director for Commercial Bank supervision pledged close cooperation with the banks following a spate of recent bank closures.
He also urged the banking industry to educate their financially illiterate clientele.
“As regards the stick, we prefer to the use the carrot. We urge banks to comply with standards and to ensure that they create products and services that are relevant to customers,” Twinemanzi said.
“Do not take advantage of potentially ignorant customers. Customers should know what their rights are,” he urged players in the banking industry. Among the little known rights of a borrower is the 14 days cooling off period where a borrower can withdraw from a credit or loan agreement without penalty.
Tineyi Mawocha, Opportunity bank’s Chief Executive Officer noted that the bank is investing in new technology, innovations and marketing in efforts to move from being a tier 2 financial institution to a fully-fledged tier 1 commercial bank.
Mawocha revealed that the bank’s core capital stands at sh28b, which is slightly higher than the minimum capital requirement of sh25b for a tier I bank. Its loan portfolio stands at sh59b while deposits stand at sh40b. Most of the Bank’s core clientele consists of small and medium enterprises.
Kampala Central MP Muhammad Nsereko, welcomed the bank to its new location and urged management to hire locals to ensure support from the community.