Corti Lakuma, Job Lakal, Gayathry Venugopal and Ronald Ochen, researchers and an associate with Economic Policy Research Centre (EPRC) were awarded plaques for their paper “Identifying the Sources of Commercial Bank Risk in Uganda Using the BASEL-3 Framework” submitted to Uganda Bankers Association in line with the second Annual Bankers Conference which took place on 17 July 2017 in Kampala.

The paper notes that Uganda’s banking sector, despite having a better loan portfolio and numerous deposits valued in trillions of shillings, continues to face vulnerabilities such as rising non-performing loans (NPLs), nominal depreciation of the domestic currency, and high cost of credit.

Uganda Bankers award EPRC

Themed “Managing Risk in a growing and fast Environment” the conference drew a number of speakers, CEOs, government officials and financial legal experts who raised and discussed challenges affecting the development of commercial banks.

Matia Kasaija, the Minister of Finance, Planning and Economic Development noted that Non-Performing Loans (NPLs) led to closure of Crane bank and Global Trust bank, which were taken over by DFCU.

He added that NPLs make commercial banks fail to pay for the goods and services and blamed the bankers for not properly following up the money lent to clients.

Other risks raised during different sessions include fluctuation in interest rates, social media tax, excise duty, stamp duty and the new taxes on mobile money, which have both direct and indirect impacts on the financial sector.

EPRC Researchers called for an enhanced business environment to keep inflation at bay.

Keith Muhakanizi the Permanent Secretary and Secretary to the Treasury, Ministry of Finance, Planning and Economic Development believes that the new taxes will ensure that all Ugandans contribute to national financial needs.

However, Fabian Kasi, the Managing Director Centenary Bank says mobile money helped Ugandans, many of whom were earlier excluded, access the financial ecosystem. He asked for revision of the mobile money taxes.

Julius Kiiza, a political economist observed that mobile money is cash transferred as a surplus to those in need. He argued that the multiple times such money is taxed, makes the tax unjust.

Jibran Qureishi, the Standard Bank East Africa’s regional economist, urged sector players to be mindful of how risks evolve as well as the new banking systems that involves trade in online currencies, to ensure financial stability in Uganda’s financial industry

According to Bank of Uganda Governor, Emmanuel Mutebile, timely intervention on distressed banks helps save the banking sector from adverse effects of poor performance. During the conference, bankers called for protection of financial sector regulators against political interference.

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