High loan processing fees hurting SME’s

Kampala,Uganda | THE INDEPENDENT | Small and Medium Enterprises in Uganda are restraining from accessing credit facilities due to high processing fees. This was revealed during a recent workshop organized by Enterprise Uganda in Kampala.

“When you ask for a loan, they choose their own surveyors whom they pay by deducting money from your account. The minimum amount I pay is usually around Shs500, 000. They do not have standards that are approved,” said George Mpagi, the managing director of Image Crusade Advertising.

He said banks tend to assign their own surveyors that usually undervalue collateral and underrate the loan amount that should be given to borrowers.

But the Uganda Bankers Association Chairperson, Fabian Kasi, said the high fees are attributed to the statutory and regulatory costs such as taxes on title mortgaging which are not determined by commercial banks.