Group banking offers better returns

By Swaib Raul Kanyike

Kampala. Like any other sector, banking is undergoing constant evolution, which calls for consistent innovations to drive customer satisfaction.
Speaking in an interview in Kampala yesterday, Ms Ruth Asasira, the Opportunity Bank microfinance manager, said group banking is a win-win arrangement for the bank and the customers because the two can have better returns.

For instance, she said, group members are taken through a series of financial literacy training sessions before they can be given loans to understand their obligation.
“We give [such groups] loans at an interest rate of 2.2 per cent. While [group] savings are given up to 5 per cent on a monthly basis,” she said.
Banks have been innovating in a number of arrears to grow their numbers as well extending the reach. Dealing with groups, Ms Asasira said, provides a better avenue for repayment and recovery.

“It is easier to deal with groups than individuals because naturally, groups stand a solid collective bargaining ground,” said Asasira.
For many years, Ugandans have formed groups for saving, borrowing and investment purposes. Ms Asasira also pointed to the fact that group banking provides secure and safer custody and investment prospects.
For example, she said, group are given an option of three signatories to the account, which makes it hard for a single person to access the money.


Customers no longer have to walk to banking halls to access their accounts, thanks to technology. Signatories are notified through their mobile phones to enter an approval code, which promotes transparency.

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