Micro credit: Good or bad for Uganda’s poor population?
Micro-credit is fast becoming a darling to millions of Uganda’s population following the rollout of new credit windows between financial institutions and telecom firms.
But financial experts are worried that the new products may not create as much impact to the economy because of the high interest rates due to the risky nature of the credits. The experts says the micro-credits are also geared mainly towards consumption and emergences rather than investments.
“The financial institutions or banks at the moment are trying to be innovative to capture everybody who would want to get into the credit area for them to make money but is not good for the economy,” said Ramathani Ggoobi, a policy analyst and a lecturer for economics at the Kampala-based Makerere University Business School.