High interest rates charged on loans from commercial banks are a major impediment to Uganda's growth, members of the business community say.
Most Banks charge an interest rate of up to 28 percent. But borrowers are concerned that the rates are prohibitive and an obstacle to business and trade.
Andrew Rugasira, the proprietor of Good African Coffe says that small businesses and startups were finding it very hard to pay back bank loans at such a heavy interest rate.
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Former Nigerian Finance Minister Dr Ngozi Okonjo Iweala advised the Central Bank to find a solution to the high interest rates saying access to credit is key to economic growth.
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Meanwhile former Finance Minister Maria Kiwanuka says commercial Banks were facing a challenge with high numbers of defaulters. She said many Ugandans were still illiterate about the banking sector and advised Bank of Uganda to guide entrepreneurs on how to pay back the loans to banks.
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Bank of Uganda Deputy Governor, Dr Louis Kasekende admitted that rates are still high. He promised that Bank of Uganda will ensure that borrowers are protected from prohibitive interest rates.
