Mathias Katamba, the Managing Director of Dfcu has said the bank is smoothly working with covid-19 hit business owners on loan repayments without affecting their businesses’ full recovery, despite the expiry of the Credit Relief Program (CRP).
The CDP enables re-scheduling of a debt obligation like a loan which provides a borrower some form of relief in how and/or when they meet their debt obligation(s) to lenders.
The program was first rolled out in April 2020 by the Central Bank of Uganda with an aim of maintaining financial stability and reducing the economic impact of COVID-19.
Katamba, while speaking to journalists at the launch of Uganda’s Top 100 Mid-Sized Companies in Kampala on Wednesday, said the program has been accessed by a huge number of customers over the last two years.
“The program has allowed more customers to be able to delay their repayment and have more moratorium (a legal authorization to debtors to postpone payment). Over time, many came back for the second one because their sectors delayed to reopen. This helped businesses to keep the liquidity that they would have used in repayments to inject into the same businesses and keep them alive and going,” Katamba said.
Though the mechanism has been extremely helpful, he said, CDP expired on September 30 and the banks had to scrap the moratorium.
“The compliance accommodation came to an end at the end of September and from a relationship management, banks are working with individual customers to understand the outlook of their businesses for the next three, six months to and understand the situation,” he said.
Beyond this, he said there will be a time when businesses shall come back for support to help them reignite and restart.
Meanwhile, John Walugembe, the Chairperson of the Federation of Small and Medium Enterprises said that government will any time from now release the Shs 200Bn stimulus package to the covid-19 hit SMEs.
“I don’t know when but we were assured that any time from now, the money will be available for these SMEs to access. However, the final decision will be announced by the Minister,” he said.