Uganda Bankers Association’s new chairman to prioritise sustainability

The newly elected executive team of the Uganda Bankers Association (UBA) plans to prioritize Environmental, Social, and Governance (ESG) issues to enhance the banking sector’s responsibility to society, customers, and stakeholders.

“We are living in an era where business sustainability is a priority,” said Julius Kakeeto, the newly elected UBA Chairman in an interview. He is also the Chief Executive Officer of PostBank Uganda.

Kakeeto was elected on May 17 at the association’s Annual General Meeting (AGM) in Kampala.

Promoting ESG aspects, Kakeeto noted, will solidify the sector’s growth prospects, which he described as “stable and resilient.”

He shared recent industry statistics, indicating that the Supervised Financial Institutions (Tier I, Tier II, and III) have published their financial performance, reflecting overall industry growth.

The total assets for the supervised financial institutions (SFI) industry increased by 7.5%, from Shs45.8 trillion in 2022 to Shs49.5 trillion by the end of 2023.

The non-performing loan ratio improved, decreasing from 5.3% in 2022 to 4.6% by December 2023.

Aggregate industry profitability also rose, growing from Shs1.2 trillion in 2022 to Shs1.4 trillion in 2023.

Kakeeto highlighted continued investments in information communication technology and delivery channels, especially digital and electronic channels. The industry’s ICT expenditure nearly doubled, reaching Shs694 billion in 2023 compared to Shs392 billion in 2022.

“Most member banks and financial institutions have met the new capital requirements and are well-positioned to continue supporting customers and the economy,” Kakeeto stated.

Kakeeto pointed out significant market opportunities particularly in the small and medium enterprise (SME) in areas such as oil and gas, construction and real estate, agro-processing, and manufacturing for both domestic and regional markets. Additional opportunities lie in infrastructure development and the rapidly expanding services industry, including hospitality, health, education, and ICT services.

Kakeeto acknowledged the challenge of expanding a large base of reliable borrowers, emphasizing the collective effort required to address this issue.

Credit expansion thrives in an environment where borrowers have both the ability and willingness to repay their loans.

Another challenge is e-fraud, often resulting from third parties and customers negligently disclosing transaction security credentials. High operational costs, linked to delays in settling arrears, litigation cases, and poor infrastructure, are additional challenges faced by the sector.

However, he said his leadership will succeed amidst the prevailing sector challenges given that the industry is highly liquid to support the economy through lending.