The Independent Uganda: You get the Truth we Pay the Price
Tororo, Uganda | THE INDEPENDENT | A total of 250 families in Tororo are seeking parliament’s intervention to stop their impending eviction from land that they used as collateral to secure a loan from DFCU bank.
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 and that 250 families had been identified with over 2000 people to benefit from the project. But they stopped financing the 2.5 billion Shillings loan facility after receiving a letter from the Standard Gauge Railway (SGR) informing them of an intention to acquire the land to construct a railway line.
George William Muyanja, the chairman of Kasoli tenants Sacco told Parliament’s Physical Infrastructure Committee 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 bank.
The MPs have since 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).
“In 2010, a Memorandum of Understanding was signed between five stakeholders including Kasoli community represented by Kasoli tenants SACCO, Ministry of Lands, UN-Habitat, DFCU Bank and Tororo Municipal Council and the five were to cordially steer the project construction. The memorandum gave land to the sitting tenants of Kasoli as a government contribution at a minimal cost and this was later waived off to make the houses affordable to the beneficiaries,” reads part of the petition.
The project implementation started in 2012 by identifying and signing a contract agreement between Kasoli SACCO and Empire contractors and the beneficiaries paid an advance deposit of 10 per cent of the expected cost of the houses, and the bank loan duration to take 15 to 20 years. The first phase 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 wait on the second phase.
“As we were preparing house warming party, we received a letter dated March 1, 2016, from Standard Gauge Railway (SGR) informing us of their intention to acquire land for construction of SGR station and that it was affecting the whole Kasoli Housing project area,” said Muyanja.
He said that this notice halted the project and 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 by Sebalu and Lule Advocates, representing DFCU Bank on March 17, 2020, and November 12, 2020.
Also, eviction notices have been 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.
The residents asked Parliament to help stop the ongoing eviction orders and force SGR to either compensate the residents so that they pay back DFCU or government writes a letter of commitment that they would pay off the loan.
Sarah Opendi, the Tororo Woman MP said that Kasoli was a real slum and the project was a model project that government would learn and replicate same projects in other parts of Uganda. She said that the project was messed up by the poor planners in government.
Roland Ndyomugyenyi, the Rukiga County MP said that scrutiny into the documents reveals that at the time the loan was acquired, the government hadn’t registered the land in the names of Kasoli SACCO.
Hillary Lakwang, the Ik County MP also wondered how DFCU came to approve a loan when the Kasoli SACCO had no land title registered in its name. “Before getting the loan, the borrowers should have brought the land title. This is like a betrayal to the Kasoli people. How did DFCU give you the loan knowing you don’t have the land title?” he asked.
Attan Moses, the Soroti East MP also wondered why the land had not been transferred to the Kasoli residents.
However, Timothy Kazibwe, the Kasoli SACCO lawyer said the government admitted it was an oversight to transfer the mortgage title to DFCU Bank before transferring the land title to the SACCO.
Documents before the committee show that DFCU extended the 2.5 billion loan on 19th March 2013 to the SACCO and the borrowers also paid 37 million Shillings in the facility and an additional 37.5 million in legal fees to the lawyers for drafting the loan contract.
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