UGANDA, Kampala | Real Muloodi News | Kampala appears to be heading for a real estate crisis. Many buildings are now standing with a few tenants, or are empty because there is no middle-income status. Martin Aliker Jr. says there is a strong possibility of a prospect on loan default.
According to Mr Aliker, precise factors configure the creation of the middle class, specifically access to capital and credit. There is a need to make use of the tools already available to fix this real estate crisis in Uganda.
Mr Aliker highlights 6 ways to bridge the gap between banks and the real estate;
- The re-establishment of locally based credit unions to uplift involvement in banking and savings.
- There should be a universal fair credit act with a Consumer Bill of Rights. The consumer bill of rights needs to be expressed to the conception of the most rudimentary understanding. This would, in turn, safeguard financial institutions as well as consumers with transparency. A fair credit act can be appropriate for any consumer with an account in any regulated bank regardless of one’s status. Consumers should have a credit score known as Credit Bureau Record (CBR). Such CBR would be estimated based on the debt-to-income ratio. The current CBR twisting in banks is bounded in scope, and its true calculus remains rather a puzzle.
- Bank lending exercises must be patched up into a sturdy consumer accessible system by instituting fair and non-usury regulations which protect consumers from the demand of collateral as equity.
- There is need for consumer trade commission oversight. It should be an unprejudiced body whose members are pinched from the banking sector, government and private citizens.
- Bank of Uganda should regulate lending institutions by lowering its lending rates. Some private banks have a graduated interest system. The longer the terms, the higher the interest. This premium can be described as ludicrous. How does one advance with their family to middle-income status when, if one wants to buy a home with a mortgage and is subject to 2.5 per cent interest on a loan beyond two years?
- A minimum livable wage based on the average rate of annual inflation needs to be instituted. This would abet those in the upward mobility trend for affordable housing. The dispute that minimum wage causes inflation is from those that draw in swindling. Let us employ proven socio-political economics.
Mr Aliker adds that this piece of work is not undemanding, but feasible. Everyday that goes by costs advancement and development. He says it is time to transform Uganda into a more dynamic, energetic, competitive, and prosperous nation.
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