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DFCU Bank Questioned on Impending Eviction of Kasoli Community Residents

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Chris Sserunkuma, the in-charge of Special Assets at DFCU Bank appeared before the Physical Infrastructure Committee of Parliament on Wednesday following a petition from the 250 families seeking to stop their impending eviction from land that they used as collateral to secure a loan.
13 Oct 2021 17:18
Parliament of Uganda

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DFCU Bank has been put to task to explain its move to evict 250 families in Tororo before the expiry of their loan term.

Chris Sserunkuma, the in-charge of Special Assets at DFCU Bank appeared before the Physical Infrastructure Committee of Parliament on Wednesday following a petition from the 250 families seeking to stop their impending eviction from land that they used as collateral to secure a loan.

The residents under the Kasoli Tenants SACCO Ltd acquired the loan in 2013 to construct 250 housing units under the Kasoli Housing Project on 5.5 hectares of land. However, these stopped financing a 2.5 billion Shillings loan facility after receiving a letter from the Standard Gauge Railway (SGR) informing them of an intention to acquire the same land to construct a railway line.

Information before the committee indicates that the residents expected the government, through the SGR project, to compensate them for the land and in turn, pay off the bank loan. But the compensation has never materialized, and they are now facing an impending eviction from the land, by the Bank.

MPs learnt that the community members who are property owners in Kasoli slum organized themselves earlier in 2003 under the SACCO to pilot the housing project on the land that belonged to Uganda Lands Commission (ULC). The first phase of the construction was completed in 2016 with 92 houses built and the beneficiaries who had deposited the 10 per cent requirement were allocated houses as the rest of the beneficiaries waited for the second phase.

However, on March 1 2016, the residents received a letter from the Standard Gauge Railway (SGR) informing them of their intention to acquire land for the construction of the SGR station, which affected the Kasoli Housing project area. This eventually prompted the residents to stop financing their loans with the hope of receiving compensation from the government in three months.

The residents have so far been served with two notices of default through Sebalu and Lule Advocates, representing DFCU Bank on March 17, 2020, and November 12, 2020. Also, eviction notices were served by Bemug Strict Auctioneers and Court bailiffs on April 23, 2021, and September 19, 2021, giving them only 30 days to clear all the outstanding loans or vacate the property within 14-days from the date of service despite the loan term being 15-years.

Today, Committee Chairperson David Kalubanga and other legislators questioned a move by DFCU Bank to enforce an eviction before the loan expiry date.  Ik County MP Hillary Lokwang shared the same sentiments.

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Rukiga County MP Roland Ndyomugyenyi wondered whether DFCU disbursed all the money considering that the housing project was not completed.

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Sarah Opendi asked DFCU Bank to avail the committee with a copy of the Land Title to ascertain when Uganda Land Commission became the owner of the land and also avail payment details of the residents.

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In response, Sserunkuma tabled the land title on which the mortgage was entered and also informed the committee that the loan principal amount increased to 2.6 billion Shillings after accrued interest was capitalized to form part of the loan. He added that the Bank chose to take drastic measures even before the expiry of the loan term after ascertaining that it was the only reasonable measure to recover the money.

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Legislators appealed to DFCU to halt its measures so that parliament resolves the matter amicably in the interest of all the parties.

However, Sserunkuma said that the bank can only postpone its action if they have a written confirmation within 14-days assuring that the loan will be paid and details of the entity taking responsibility to clear the payment. He added that the written confirmation also needs to have reasonable timelines and that the committee should be irrevocable.

But the committee chairperson asked DFCU to formally write their demands.

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