Sunday, May 3, 2009

Uganda: Only 16 Percent Have Bank Accounts

David Muwanga, New Vision, 30 April 2009

ONLY 16% of Ugandans participate in formal banking, Fred Omach, the finance (general duties) state minister, has said.

He said this was because most of the banks were concentrated in urban areas.

"The majority of Ugandans, especially in rural areas, are largely underserved, while in some areas, there are no banks. This is the reason why a small fraction of Ugandans have bank accounts," Omach said.

He said the Government and the private sector were working together to create an enabling environment for the banking sector to expand its branch network by encouraging licensing of more banks.

This was during the opening of the Diamond Trust Bank in Industrial Area branch recently.

"Therefore, the strategy by Diamond Trust to open branches in Jinja, Arua is commendable.

"Your planned expansion to Lira, Gulu and Busia will greatly reduce this void," Omach said.

Mahmood Manji, the bank's chairman, said the bank's deposits grew by 119%, while the loans grew by 104% over the last financial year.

He said the bank's profit before tax increased by 70% during the year.

Manji said the Diamond Trust bank grouping East Africa are implementing a rapid branch expansion programme to increase from 36 to over 100 branches in the next three years.

"The bank will open a commercial branch in Bujumbura, Burundi next month and over a medium to long term the bank intends to establish operations in Rwanda and Mozambique.