Mumba Kalifungwa (L), the Managing Director at Absa Bank Uganda speaking to business journalists and editors
Banks will play an important role in Uganda’s economic recovery from the COVID-19 impact, Mumba Kalifungwa, the Managing Director at Absa Bank Uganda has said.
He made the remarks during a media round table discussion about the impact of COVID-19 on Uganda’s economy held at Serena Hotel on Wednesday.
Mumba however said the effectiveness of bank-supported economic recovery is dependent on a resilient and healthy banking sector.
“There is no doubt that our banking sector is strong and resilient,” Mumba said, adding: “The quick response of the Bank of Uganda and subsequent measures instituted to mitigate the impact of COVID-19 have been significant in boosting the response of commercial banks to the economic shocks created by the pandemic.”
He reiterated Absa’s commitment to the socio-economic growth of Uganda as a key player in the banking and financial services sector.
“We have a long history of investing in sectors crucial to socio-economic development of the country including trade, industry, agri-business, energy, small to medium enterprises and infrastructure,” he said.
Credit Relief Support
He noted that the bank has provided credit relief support to its customers in economic distress as a result of the pandemic.
“So far, over 1,500 customers across both retail and corporate segments were the beneficiaries of approved credit relief solutions,” he said.
Financial and Business Advisory
“Whereas we have provided this support, we also realize that the pandemic adversely affected the financial security of both individuals and business enterprises.
As a result, we have adopted the approach of developing holistic and personalized value propositions considering the unique circumstances of our customers,” he said, adding: “Based on various interactions with customers, we recognized a general need to educate customers to provide them with information and enabling them to make the right financial decisions.”
Trade finance as an enabler for agricultural exports
Agriculture is the backbone of Uganda’s economy and will be vital to economic recovery, Mumba said.
He revealed that the bank’s interventions in the sector are currently focused on providing access to export markets for agricultural commodities. This has so far yielded results with commodities like coffee, soya, sim sim and chia seeds, he revealed.
“With this approach, we have found unique solutions to address the challenges that have traditionally inhibited access to finance for both primary and secondary agriculture players that include lack of collateral or tangible assets,” Mumba said, adding: “With our model, we are able to provide secondary agriculture players with structured trade financing to access export markets and in addition, provide short term working capital to out-growers to enable them access inputs and raw materials to be able to supply to the secondary players. Working with our partners, this intervention has helped us realize shared growth supporting our customers to realize sales growth of over 35% and witness annual export volumes grow to an estimated 40 million dollars.”
Enterprise Supplier Development for sustainable business growth
He revealed that supporting sustainable SME and business growth remains a key challenge for Uganda.
“This is an area in which we are committed to making a difference. Through our Enterprise Supplier Development program, we have been able to complement the nation’s import substitution program by empowering local contractors to take up opportunities which were previously the preserve of foreign firms,” Mumba said, adding: “With the disruptions to foreign supply chains, as we observed during our earlier discussion, there were raw material shortages which presented an opportunity for local manufacturers to take up, many of whom are small and medium sized enterprises.”
Digital solutions
He noted that Absa has also focused on strengthening our digital platforms and offerings to ensure business continuity in the face of the restrictions imposed by the pandemic.
“We introduced the first ever trade finance portal enabling our customers to apply online for facilities as opposed to coming to a physical location. This has resulted in even greater efficiency and enabled us to be more responsive to customer needs,” he said.
He added: “However, we also realise that there may be those who find it difficult to bank online and would require support. This, we have been able to offer leveraging the strength of digital technology providing an automated and virtual assistant, The Absa Chat Bot, that responds in real time to customer queries.”
