Business
Uganda: Traders strike over high interest rates
Traders in Kampala, Uganda on Wednesday started a- three day sit down strike protesting commercial banks’ refusal to lower interest rates on loans given to them. The traders under their association Kampala City Traders Association (KACITA) accused commercial banks of arbitrarily increasing interest rates on even old loans; Interest rates on old loans were increased after the central bank raised its key rate by 10 percentage points to 23 percent in November, 2011.
The traders want the Banks to stop charging increased interest rates on old loans and to refund the monies they say has been illegally collected from borrowers in form of increased interest rates.
The Central Bank Governor Tumusiime Mutebile has insisted the Bank of Uganda cannot intervene, while the Banks have said they will not reduce the interest rates.
By 8:00 am, the normal opening time, the Shops in Kampala city centre and other surrounding districts of Masaka and Mityana remained closed. Some traders were seen hanging outside their shops waiting to hear from their leaders.
Kampala Traders under their Association (KACITA) announced a three-day closure of shops until government prevails over commercial banks to lower the interest rates; they condemn Bank of Uganda for refusing to act on the high interest rates that are biting traders who got loans from banks.
According to KACITA spokesperson Issa Sekitto, the traders will not open their shops for three days unless the banks agree to charge the interest rates that were applying when the traders got the loans.
The traders are also threatening to withdraw money from their respective banks as a way of showing anger to the banks.
Sekitto says if after the three days the banks have not changed their mind, KACITA members will meet on the 14th and agree on the next course of action.
