Kampala City Traders Association Using Business Relations to Access Loans
A customer at the Kacita bank.

Kampala City Traders Association Using Business Relations to Access Loans

A welcome innovation.

By Jude Bukenya
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First published: January 10, 2006

Imagine you have gone to a bank to ask for a loan. Instead of the credit officer asking you for a land title, car registration card or a house (the usual collateral security that banks always ask), they ask you about your business relations among the people you work with.

That is exactly what Kampala City Traders Association (KACITA) members are experiencing. In an effort to ease access to low interest loans, the traders have started the KACITA Savings and Credit Cooperative Society limited, which they are operating as a savings and credit bank.

Unlike in other banks, KACITA Savings and Credit Cooperative Society considers the traders' business relations among other people he/ she works with as a security to access a loan from the cooperative society.

Violet Nakimera, the Operations manager of the traders' cooperative saving society says that their financial assistance depends on the character of the potential business borrower, because some people do not want to pay back loans.

"We consider your character and the working relations you exhibit where you run your business from. Some one may have a collateral, but may not be good at repaying," she explains.

The nine-month old KACITA Savings and Credit Cooperative Society limited has over 800 members around the country. A trader can access a loan after registering as a member and buying shares in the cooperative society.

A member trader is required to register and to have at least one share of shs 10,000, and an active savings account. To qualify for a loan, the individual trader should own at least 10 shares. But still, any trader has the option to buy shares not exceeding one third of the total share capital of the savings scheme.

Nakimera says that a customer could access between one and three million shillings (shs.1,000, 000/= to 3,000, 000/=) for quick loans which are payable within a period of a month with an interest rate of 3% per month. The interest on fixed deposit accounts of members is 12% per annum. This high rate is to encourage members to save.

Most loans the cooperative society gives out are targeting the importers to help them in paying taxes for their imported goods to Uganda Revenue Authority. They also have commercial loans, salary loans among other loan services.

"Our bank is flexible in terms of delivering services depending on the need by the customer since it operates almost all day from 8:00am up to 4:00pm during weekdays and at least up to midday on Saturdays," she says.

Nakimera told Ultimate Media that they are soon initiating new packages, which include salary loans for people who are employed by KACITA members in their businesses.

"Most financial institutions only look at the owners of businesses forgetting that the other people employed in those business are in need of financial assistance." she noted.

She says that they also expect to open up a branch in Iganga this year because they have discovered that the people from there have appreciated their services.

"It's one area where we have had the biggest turn up of business people who are interested in our services," Nakimera says.

Kasita's Nakimera
Kasita's Nakimera

Nakimera adds that as the operations and business opportunities continue to grow they intend to also offer clearing services to their customers who import products from abroad.

But do traders trust their services? She says that the city traders have the trust for the bank because they are the owners and work so hard to improve it's status and operations on top of the clear-cut ways in which it softens business for their operations.

Their mission is "to organize and direct the economic efforts of members and the business community in general for the promotion and enhancement of savings which can readily be available for operational capital as well as boosting small medium and long term business enterprises and operations in the city and it's adjoining areas."

This certainly comes as a welcome innovation for many of the traders who have continued to complain over the lack of quick and friendly loans. Many traders' businesses operate on loans, yet they always claim the loans currently available from mainstream financial institutions are charged at very high interest rates.

They can be contacted at
3rd floor, Royal Complex,
Plot 16A, Market Street,
Tel: +256 41 344963/ +256 41 578202
Fax: +256 41 345227
Mobile: +256 77 436588
E-mail: kccsfinance@37.com

By Jude Bukenya
more from author >>
First published: January 10, 2006
To learn more about Ultimate Media Consult go to www.ultimatemediaconsult.com.

Jude Bukenya is a senior political and business reporter with Ultimate Media Consult (U) Ltd.