Finance

Finance (16)

Pru Dollar Provides Financial Security To Ugandan Families

Prudential Assurance Uganda Limited, a fully owned subsidiary of Prudential plc continues its mission to provide flexible and innovative products that promote the financial security among Ugandan families with the launch of Pru Dollar.

This product allows the customer to make monthly payments in U.S dollars for a period of 8-15 years. Whether a customer is planning for his or her child’s education, saving for a home or simply making sure their loved ones are protected, Pru Dollar hedges their savings against the risk of currency devaluation thereby preserving the value of their policy proceeds upon maturity. 

This product gives customers peace of mind that their loved ones are protected. If the customer passes away or gets permanently disabled, Prudential will immediately pay a 50 per cent lump-sum to the beneficiary and take over payments for the remaining period.

In addition, Prudential will pay out another 100% of the maturity benefit at the end of the agreed period. If no claimable event occurs, the guaranteed lump-sum (with any accrued bonuses) is paid to the insured at maturity.

The product acts as an investment plan where Prudential pools money with that of other policyholders and invests it in a range of carefully chosen assets. If the investments perform well, the customer shares in the profits via bonuses, which is declared each year and reinvested on their behalf.

Speaking at the launch recently, Arjun Mallik, CEO Prudential Uganda said “Our endeavour is to provide families with the protection and savings solutions they need to secure their financial futures, and the long-term opportunities for us in the Uganda life insurance market are immense.”

Matt Lilley, CEO of Prudential Africa added “Since we re-entered the market in 2015, our new business sales in Uganda have grown significantly from, so has the size of our team, and number of our active sales representatives. Prudential is committed to making long-term investments in Uganda so that we are able to bring the benefits of life insurance to many more people”

Speaking at the event, Sarah Mann, Deputy British High Commissioner said Prudential plc is a multinational company and one of the world’s leading life insurance brands.

NSSF Infrastructure Investment Gets Global Recognition

The National Social Security Fund (NSSF) Uganda won the Africa Pension Fund Infrastructure Investment Initiative of the Year Award, beating other top pension funds on the continent. 

The NSSF Chief Investments Officer, Gerald Paul Kasaato, received the award on behalf of the Fund during the Africa Investor Infrastructure Development Summit held in Durban, South Africa on Tuesday, 2 May 2017. 

The Fund was recognized along with other global pension funds as well as leading pension fund personalities, for efforts made so far and being made in investments in the infrastructure space. Managing Director Richard Byarugaba said that the award is another milestone for the Fund for its prudent, yet aggressive investment strategy. 

“We are glad that our investment efforts such as the upcoming UN Model Project, the Off taker project in Real Estate, contractor financing and our investment on PTA Bank to finance infrastructure have been recognised. As a Fund, we are delighted but not surprised by this award,” Byarugaba said. 

In November last year, the Fund made an additional investment of about Ushs59.4 billion in Umeme Limited, effectively increasing its stake in the company from 15.5% to 23%. The Fund also invested in PTA Bank, which predominantly supports infrastructure funding.  

“We have become a benchmark for the social security industry in the East Africa region and we are steadily climbing the ladder to the top on the African continent,” he added. 

Byarugaba said the Fund is committed to preserving and growing the value of its members’ savings, by paying a real rate of return above the 10 year inflation average, driven by an aggressive investment strategy within Uganda and East Africa. 

The Fund has over the last 5 years consistently surpassed its target on interest payment to its members. Last year, the Fund paid an interest rate of 12.3%, which was higher than the 10-year average rate of inflation rate of 8.6%. 

This is the second time that the Fund is recognised at a continental and global level for its investments. In 2015, the Fund won the African Pension Leadership Initiative of the Year Award for its diversification efforts in the equity space. 

Commenting on the award, CEO of Africa Investor Hubert Danso said for Africa to realise its economic potential, it is critical that long-term industries, such as infrastructure, energy and transport, provide the groundwork for private equity transaction growth and job creation in Africa. 

“We are therefore delighted to recognise the leading role that institutional investors and, more especially, international and domestic pension funds play in these transformative investments in Africa. We salute all the winners, both pension fund leaders and institutional institutions,” Danso said. 

Africa Investor Summit partners include the World Pensions Council, the Institutional Limited Partners Association, the African Pension Fund Network and the African Securities Exchanges Association, amongst other prestigious institutions.

 

Customers To Receive Prudential Bonus

Prudential Assurance Uganda Limited announced that customers will receive a bonus of 4 per cent for 2016 on their sum assured: A sum assured is a guaranteed amount paid at maturity or any other claimable event

The bonus applies to the following Prudential products: Pru Lifesaver, Pru Lifeplus and Pru EduSave. Which is an easy way for customers to save for their children’s education and protect the future of their loved ones. Prudential invests money in carefully chosen assets on behalf of customers, who receive a share of the profits as a bonus each year, provided they pay their premiums regularly.

Arjun Mallik, Chief Executive Officer Prudential Uganda, said: “As a business, we are focussed on helping our customers achieve their goals – be it saving for their children’s education through Pru Edusave or building a nest egg for the future and we will always deliver on promise.

“I urge all customers to pay premiums in time to ensure the financial future of their loved ones is always protected” He added This bonus will be awarded to all policyholders whose policies were active on their policy anniversary in 2016.

 

Is Bank Of Uganda Being Soft With Foreign Banks?

Before the dust raised by Bank of Uganda when it took over the management of Crane Bank for being undercapitalized, news that more banks will suffer the same fate emerged. The banks that were rumored to be clamped down include Cairo Bank, DFCU, Centenary, ABC Bank, Bank of Africa, Diamond Trust Bank and Eco Bank. Bank of Uganda has not come out to clarify on the rumor.

Bank of Uganda took over the management of Crane Bank last week days after defending the Ruparelia owned bank. The move caused a lot of uncertainty and debate in the public domain. Bank customers in the sector panicked fearing that they would lose their deposits. The move did not go down well with Crane Bank owners who described the decision by Bank of Uganda as malice. They say they were looking for an equity investor and the central was aware.

Bank of Uganda’s silence on the state of Cairo Bank, DFCU, Centenary, ABC Bank, United Bank of Africa, Bank of Africa, Diamond Trust Bank and Eco Bank majorly owned by foreign investors has been received with mixed feelings by some sections of the public.

They wonder why the central bank rushed to takeover Crane Bank, an indigenous bank, while foreign banks are equally struggling. Some banks, especially those owned by Nigerians are said to be not making even. They are reportedly making no money at all yet Bank of Uganda looks the other side.

Alfred Owino, a retired banker says that if Bank of Uganda wants a functioning banking sector, all banks that are undercapitalized must be dealt with in a manner that brings sanity in the sector. “It shouldn’t be selective action. International banks repatriate profits yet local banks like Crane Bank invest in the country.” Owino stated in an interview.

Christine Alupo, Director Communications at Bank of Uganda issued a statement on Monday saying the financial Sector is Stable, Sound and Resilient. She encouraged the public to continue conducting their banking business without panic.

But news that Cairo owned by Egyptians and United Bank of Africa owned by Nigerians are undercapitalized and face closure contradicts Bank of Uganda message. As long as such rumours continue to emerge the banking sector will face panic and further insecurity.

“Government of Uganda should be supporting local businesses. Bank of Uganda should be even more keen on foreign banks because at the end of the day, if the fail, they will pack up their banks and return wherever they came from and people will have lost their money. Bank of Uganda should go for them too.” Henry Isabirye, an economics tutor, said.

The Ugandan economy has been not faring well and to many pundits the strife affecting the banking sector doesn’t come as a surprise. High cost of credit has kept away borrowers. Those who borrowed are failing to pay back the loans. People don’t have money to save with banks. You cannot also rule out the impact caused by mobile money. People now prefer to save on their phones than go to the banking halls.

Crane Bank Saga: Bank Of Uganda Breeding Liquidity In Banking Sector

The banking sector in Uganda is poised to slumber into unprecedented liquidity if Bank of Uganda continues to witch-hunt commercial banks, a Crane Bank official said adding that the entire banking fraternity in the country is not doing well. He warned that the public should pay attention to their bankers because of them are worse off.

Bank of Uganda governor Emmanuel Tumusiime Mutebile on Thursday in a public notice announced that the central bank was taking over Crane bank because they are ‘significantly undercapitalised’ and ‘poses a systematic risk to the stability of the financial system’.

But the official at the affected bank emphasized that while they are have liquidity issues, the bank has assets, expertise to come of this distress. He revealed that Bank of Uganda has turned down all potential investors that the bank sought to inject equity in the bank which served Ugandans since 1995. The official doubted the motive of Bank of Uganda.

“This is not good for Crane Bank and the entire banking sector and the public should worry. We have been engaging Bank of Uganda and we have a plan to get where we where before. We are looking for an investor to recapitalize the bank but look where we are,” the official said.

“Bank of Uganda is creating panic in the banking industry and this will lead to liquidity because people will withdraw their money, they will stop depositing with banks and bank will have no money to lend or invest,” he added warningly.

Crane Bank founder Sudhir Ruparelia confirmed that they were in advanced stages of acquiring a potential investor. This revelation came in the wake of rumors that Sudhir was selling the bank. Despite confirming the negotiations, he said he was barred to reveal the name of investor by the non disclosure agreement he entered with said investor.

Bank of Uganda despite saying they had ‘not received any request from Crane Bank to approve a change in shareholding’, Christine Alupo, the Director of Communication at Bank of Uganda in a statement said shareholders of commercial banks have the option of selling shares to new investors as they deem appropriate.

‘However, any new investor in a commercial bank must satisfy the regulator that they are fit and proper. The BoU does not comment on any negotiations to sell shares in a bank while these negotiations are ongoing.” She explained.

“In line with the Financial Institutions Act 2004 (FIA 2004) as amended in 2016, if a commercial bank wishes to dispose of equity worth 5 percent or more of its shares, the sale must be approved by the Bank of Uganda.”

Experts like Hellen Nakuya who manages an investment firm in Kampala also explained that people will in the long run stop going to keep their money in the banks if Bank of Uganda continues to shut down banks. “What Bank of Uganda must do is to ensure that Crane Bank doesn’t close because people will lose their savings then they will fear dealing with banks,” Nakuya said.

“Bank of Uganda should rectify anything that is wrong at Crane Bank if there is any and give it back to the shareholders and continue to guide them. We don’t want to see a scenario that befell Greenland when people lost their money.” She added.

Bankers Association Looking At Taming Cost Of Credit In Uganda

In an effort to find a lasting solution to the high cost of credit in Uganda, commercial banks under their umbrella organization, Uganda Bankers Association (UBA) embarked on a series of consultative meetings with various stakeholders.

UBA kicked off the consultative process on October 3, 2016, by meeting Members of Parliament from the Parliament of Uganda and is scheduled to meet public, private sector, and civil society member organizations between October and December, 2016.

Commenting on the initiative, Mr. Wilbrod Humphreys Owor, the Executive Director UBA said, “Uganda Bankers Association is listening carefully to the various concerns and contributions being made on this subject because the current challenges impact all of us.

“We are confident that through this consultative process, we shall find good directions towards the challenges around the financial sector and wider economyand make good progress in not only addressing the issue of the cost of credit but also tackling the real underlying causes and dynamics behind the price of this commodity called money”

Mr. Fabian Kasi, the chairman UBA remarked: “I strongly believe that the approach we are taking will result into appropriate recommendations that we can adopt to overcome this challenge and ensure that there’s sustainability in the businesses we all do.

UBA comprises of 25 commercial banks and one development bank in Uganda. Its mandate is to promote a strong and vibrant banking sector, encourage good governance and best practices in banking as well as represent the professional and business interests of its members.

Crane Bank, Bank Of Uganda Assures Customers After Baseless Rumors

Crane Bank has termed it as ‘baseless’ rumors that Bank of Uganda has advised its customers to withdraw their money from the leading locally owned bank. The bank says these rumors are being spread by ‘malicious’ people who are trying to bring the bank down.

Bank of Uganda has also come out to defend the commercial bank explaining that they have not issued such a directive. “It has been brought to our attention that messages have been circulating on Whatsapp instructing depositors to withdraw their money from Crane Bank within the next week. We wish to categorically state that these messages were not issued by Bank of Uganda,” the central bank said in a statement released on their Facebook official page.  

Today social media has been awash with rumors quoting an inside source at Bank of Uganda encouraging Crane Bank customers to go and withdraw their money before next week. The frightening message which circulated on social media reads: Guys if u know anyone with money in Crane Bank tell them to remove it …. Within the next week.

However a manager at the commercial bank has affirmed that these are mere rumors which should not cause any panic. He said “This is a well capitalized bank which has served Ugandans over the years. Our capitalization is about Ushs1.3trillion. How can we be closing? How can Bank of Uganda close such a health bank?” the manager, who asked not to be named because he doesn’t speak for the bank, wondered.

The central bank which regulates commercial banks said in a statement signed by Christine Alupo, Director Communications, that they have received several inquiries from the public on Crane Bank following reports that they are seeking strategic investors. Crane Bank recently informed the public that they are in negotiation with an investor to buy the banks shares.

On the selling of the shares, the central bank said “The shareholders of commercial banks have the option of selling shares to new investors as they deem appropriate. However, any new investor in a commercial bank must satisfy the regulator that they are fit and proper. The BOU does not comment on any negotiations to sell shares in a bank while these negotiations are ongoing.”

The bank said the selling of shares is intended to increase their capacity to be able to lend to the public. “The selling of shares need to be structured in a way that we are able to lend to the market and run a health bank. Look, we have 46 branches spread across the country, to be able to run these branches sufficiently, every branch needs to have about 2-3 million dollars to be able to lend to the customers.” A crane bank official said.

Rumors that Sudhir Ruparelia, the owner of the bank sent a letter to 500 of his 500 top debtors calling in the loans, according to Crane Bank management, is false and should be treated with contempt. Crane Bank is a Ugandan bank which has served its customers since 1995. It is the first locally established bank to cross borders. The bank operates in Rwanda and has set its eyes on entering South Sudan.

The bank which currently employees about 2000 Ugandans has been a pillar in supporting traders, farmers SMEs, educational institutions and other businesses in the country. According to a previous press statement, Crane Bank has provided financial services to corporate and retail sectors in Uganda for a number of years, largely focusing on Micro, Small & Medium enterprises (SMEs).

The award winning Bank aims not only to provide the best services at the most economical terms to its customers, but also to encourage the culture of banking within the unbanked population. Crane Bank also exercises its corporate responsibility beyond its core business. More than 15,000 people benefit from the different initiatives as part of its commitment to society.

Crane Bank owned by the Ruparelia Group, supports communities in a range of ways, through organizing medical camps, contributing to educational centers, sponsorships of various activities, contributions of school fees, as well as educating the public on financial products.

 

MTN Group Ventures Into Micro Insurance After Partnering With MMI Holdings

MTN Group and MMI Holdings on Wednesday announced the launch of a micro insurance joint venture, branded aYo. The joint venture will benefit from the scale, combined expertise and market access of both companies, to provide a strong basis to compete in a changing mobile financial services industry. 

Insurance penetration is low in many countries across Africa, and utilising the resources and capabilities that each of MMI Holdings and MTN provide, aYo will be able to improve this to offer relevant, accessible and easy to use insurance solutions to consumers. 

Commenting on the partnership, Herman Singh, Group Chief Digital Officer of MTN said that “as MTN, we are excited about this partnership as it gives us an opportunity to further expand our bouquet of mobile financial services offerings across our footprint. Working with MMI, and harnessing the rapid growth of mobile on the continent, we will be able to leverage our core competencies, strong brands and scale to deliver much-needed insurance solutions to our customers.” 

Danie Botes, Group Chief Operating Officer of MMI Holdings remarked that “the partnership with MTN will create new revenue streams for MMI, help achieve significant scale, explore opportunities in new markets and segments, and capitalise on the growth of micro insurance on the continent. The partnership will also allow us to further extend our client-centric vision of financial wellness across the Africa continent.”  

The aYo offering will be rolled out in a number of African countries from the end of 2016.

Crane Bank Offering Life Insurance Scheme With Maisha Saving Accounts

Ever since it was opened 21 years ago by Sudhir Ruparelia, Crane Bank has continued to lead the financial sector with incisive innovation.  This has position the Kampala Road headquartered bank as the leading indigenous bank in the country.

This also shows in the way they package their financial products to benefit local people. At a time when government is championing financial inclusion including promoting insurance uptake, Crane Bank started a product that both serves as a saving tool and an insurance product.

The bank introduced Crane Maisha Saving Products from which customers can choose three saving methods. Crane Maisha Products are available as an upgrade to existing customers without having to change their account numbers or Crane Access card.

Crane Maisha Access Account

The Crane Maisha Access Account Is a basic banking account that facilitates first time bankers with an efficient way to receive electronic transfers of funds as well as making payments to third parties.

Crane Access is an ATM based transactional account. The account can be opened with minimum balance of Shs10, 000. You get a Free Visa Card for the first year. And you can monitor your account through personal internet banking.

With a monthly charge of Shs2, 000 the account holder will be covered under a life insurance scheme during the period the account is maintained. The account holder uses the savings to keep a safety net for a loved one in the event of a death or disability of the account holder. 

In the event of death or disability of the account holder, Crane Bank through its partners will pay the nominated beneficiaries an amount of Shs5, 500,000 directly into their account in Crane Bank as insurance compensation.

Crane Maisha Savings Account

This is an account that facilitates flexible short, medium and long term saving with the benefit of earning interest. The bank customer earns an interest of 5% p.a. with minimum balance Shs50, 000. The customer savings can be accessed at any time through various deposit and withdrawal banking channels.

Like the Crane Maisha Access Account, with a monthly charge of Shs2, 000 the account holder will be covered under a life insurance scheme where in the event of death or disability of the account holder, Crane Bank pays the beneficiaries an amount of Shs5, 500, 000.

Maisha Fixed Deposit Account

This is a type of savings account where a deposit is made for a specified period of time that pays out a fixed rate of interest and safeguards your loved ones through a life insurance scheme.

This account encourages a savings habit as the money you deposit needs to be in the account for a period of time without you making any withdrawal. Investing in a fixed deposit account earns you a higher interest rate and can act as a fall back for your business in the event of a cash flow squeeze.

With this type of account, you get to choose how long you want to invest your money in a fixed deposit account ranging from 1 month to 2 years. It comes with life insurance cover equivalent to principal amount with maximum limit of Shs100 Million to safeguard your loved ones in the event of a death or disability.

Crane Maisha Fixed Deposits can earn you interest of about 14.5% in a period of two years. To open Crane Maisha Fixed Deposit, a minimum amount of Shs1, 000,000 is required. There is no maximum amount you can deposit.

Accessing your savings

To open any of the Crane Maisha Saving Accounts you need to have a beginners deposit amount which varies. You will also need a Local Council letter, valid ID preferably a National ID, passport, driver’s license or verified employer’s ID. You can access your savings at any of the 46 Crane Bank branches, personal internet banking, Crane Bank ATMs, SMS & Email alerts. Various minimal fees might apply in the course of operationalizing your account.

Crane Bank: Insuring You With Maisha Saving Account

Insurance is an important financial product that many Ugandans are not so keen on, they think it is not necessary. Many are forced by law to pay for motor insurance. Many Ugandans continue to ignore insurance, even life insurance which takes care of their lives.

The reasons for their lack of interest in insurance vary however with Crane Bank’s Crane Maisha Saving Account, a financial product that enables customers to save and at the same time get life insurance, many Ugandans will be get a life insurance scheme.

With Crane Maisha Savings Account, a customer can access their savings anytime, anywhere either at Crane Bank branches, Personal Internet Banking, Crane Bank ATMs, SMS & Email alerts or with any VISA enabled ATM’s worldwide.

Crane Bank marketing manager, Avinash Srivastava, explains that with minimum balance Shs50, 000 and a monthly charge of Shs2, 000 the account holder will be covered under a life insurance scheme. This is on top of earning an interest of 5% p.a.  

The life insurance scheme will be active during the period the account is maintained, where in the event of death or disability of the account holder, Crane Banks through its partners will pay to the nominated beneficiaries an amount of Shs5, 500,000 directly into their account in Crane Bank.

The bank also offer customers an option of operating Crane Maisha Access Account for first time saves or a long term Crane Maisha Fixed Deposit Account and earn a higher interest rate of as high as 14.5%. The initial deposit on the fixed account is Shs1m with no Maximum.

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