Uganda needs a fully functional development bank if the country is to finance long term funding and reduce the burden of high interest rates.
Renowned economist Fred Muhumuza explains that because Uganda lacks this bank, everyone resorts to borrowing from commercial banks which charge high interest rates.
He says by setting up a development bank, government would have decongested the commercial banks which will lead to competition, forcing the players to lower their interest.
He however cautions that the development bank should capital strong since it will be lending at low interest rates which have low returns.
Muhumuza’s comments come as the public and the private sector continues to cry over exorbitant interests compared to the situation in neigbourng Kenya.
Story By Elizabeth Muwombi
