By Mary Asujo
The Uganda Bankers Association (UBA) wants government to come up with a 300 Million Dollar medium term Education Sector Recovery fund to support Private Education Institutions as they prepare to reopen for learners in January 2021.
While appearing before the Parliamentary Committee on Education, the Executive Director Uganda Bankers Association, Mr Wilbrod Owor said that in order to help private institutions kick-start operations, government should set up an education sector recovery fund to facilitate capital support with atleast 8-15 years grace period to repay back.
UBA officials were giving their views on the motion by a section of MPs who want government to rescue private institutions from financial loss they faced due to the prolonged closure of schools. The MPs maintain that privated education institutions in Uganda have suffered worst effects of the COVID-19 pandemic.
In August this year, the Minister for Finance, Planning and Economic Development, Matia Kasaija, advised private school owners to sell school assets and repay bank loans instead of asking for government bailouts.
But in September this year, Proprietors of private schools also asked government to create a relief fund of at least Shs500 billion to enable them smoothly prepare for the reopening of schools come January next year.
Wilbrod informed members of parliament that the loan portfolio for private schools is around UGX2trillion shillings and of this, UGX557 billion was borrowed to schools, UGX594 billion was borrowed to teachers, UGX600 billion was lent to commercial buildings like hostels and UGX126 billion is the accrued interest from the loans.
Wilbrod also informed the committee that as an association, they have decided to set up a number of measures to assist schools including waiving off early repayment fee clauses, waiving off any penalty in their loan clauses, no further accruing interest on unpaid interest for 12 months, among others. The officials urged other institutions to play a part in helping private schools recover.
Wilbrod explained that they do not support Minister Matia Kasaija’s statement that schools should be sold to repay loans saying that selling schools is not a solution.