One of the reasons the banking sector has not grown in a manner that is commendable is because would be customers fear dealing with banks.
Many people believe that commercial banks are out their to rob off their hard earned money. Essentially, customers can use banks to keep their money and treasures there and to acquire loans which they can use to develop themselves.
Sometimes, depending on the choice of bank account the customers prefers, the money kept with the bank as savings comes with interests or all is chewed up in the name of bank charges, in this case, a customer loses what he or she saved.
Similarly customers who acquire loans from banks, depending on the investments they choose to inject their borrowed money into, make profits or is washed away in loses.
When a customer makes loses from the investment and fails to repay the loan, in the bank's attempt to recoup their loan, the customer loses the collateral and other moneys associated with operationalizing the loan.
Banks in Uganda have had their share of trouble with customer over mismanaged loans, the latest being Equity Bank who lately has been at crossroads with customers over mismanaged loans and related transactions.
The latest bank-customer altercation to come to the public eye is between Equity Bank and city businessman Harrison Busingye. Unlike other people having issues with Equity Bank over gone bad loans, Busingye didn’t borrow money from the bank.
Busingye, the managing director and owner of Hydra Homes (U) Ltd, according to emerging reports stood as a guarantor for his brother, Nathan Mwesigye, who was acquiring a Shs350m loan from Equity Bank in 2018.
According to Shift Media News, Busingye, as a guarantor, was demanded by the bank to mortgage a title as security for the loan. The security that Busingye staked was that of a title of a residential apartment worth Shs4.5bn located in an upscale Kampala suburb in Muyenga.
When Mwesigye struggled to repay the loan, Equity Bank, on top of selling off the trucks (worth Shs250m each) of the loan defaulter, they also went ahead to attach the property of the guarantor, Busingye's property in Muyenga.
The bank going for the property of Busingye procured the services of Excel Auctioneers and Court Bailiffs who together with their employer threatened to advertise the Muyenga house if Busingye didn't pay up in seven days. Afraid of losing his property, Busingye petitioned the Director Public Prosecutions (DPP) for help.
In the petition which Busingye filed on 9th January 2020 complained about an alleged plot by three Equity Bank officials - Abel Musiime, Joseph Munyua (Credit & Risk Manager) and Annet Nakigudde - to auction his property located in Muyenga comprising of plots 4529 Bock 244 Kyadondo.
In the report released on 2nd February 2021, the DPP instructed the Director CID to investigate the matter and the three officials.
The three Equity Bank officials had allegedly imposed on Busingye a loan of Shs175m which he hadn't applied for. Busingye further alleged that 'for purposes of illegally auctioning his property' the three officials had 'registered mortgages on the loan facilities which he never got'.
Upon being interrogated, the three bank officials acknowledged that Busingye was a guarantor for Mwesigye and that after Mwesigye defaulted, they opted to auction the guarantor’s security to recover the accumulated loan by imposing the Shs170 loan which according to detectives was fraudulent since Busingye didn’t apply for it.
The detectives also discovered that Equity Bank also registered irregular mortgages of Shs503, 600, 000, and Shs650 million to the land title of Busingye as encumbrances to the loans he never got.
Equity Bank didn’t stop at that, they also registered Busingye and his Hydra Homes (U) Ltd in the CRB as bad debtors, and further falsely registered another loan of Shs850m which he never applied for hence blocking him from accessing any loans from other financial institutions.
In simple terms, Equity Bank had slapped a loan of Shs2, 078, 600, 000 that he never got. On seeing that the matter was going out of hand, Equity Bank suspended the three officials implicated in the suspected fraud. But just a few months after CID did its investigation, other clicks in the bank are up to their games once again.
An investigation by Shift Media News reveals a new gimmick orchestrated by a one Paul Babwetere who works as Head of Recovery at Equity Bank, and Faith Lapula who works in legal department is eying to take Busingye’s property in Muyenga.
On 18th October 2021, working on instructions of Equity Bank again, Excel Bailiffs & Auctioneers in a communication Ref EBA/GEN/2021 to the Directors of Hydra Homes, Attn. Harrison Busingye, Titled FINAL DEMAN NOTICE, warned and demanded that Busingye pays the defaulted loan amount of Shs250m.
“We have instructions to demand you all the loan amount due to the bank within 7 days from the receipt of this notice unless you clear your obligations with the bank by paying a sum of 250, 265, 810 (Two hundred fifty million two hundred sixty five thousand eight hundred ten shillings ) together with any interest that would have accrued at the time of payment and 15% of the said amount being our fees,”
In the event that you fail to clear your facility with the 7 (seven days) referred to herein above, we have further instructions to advertise your security comprised in plot 4529, block 244 at Muyenga, Kyadondo, Mengo and cause for its sale to have all the money recovered," Excel Bailiffs & Auctioneers said in the notice.
Not to lose his property without a fight, Busingye through his lawyers, SIGNUM & Company Advocates wrote to the Director CID Vide (SID/CV/18/106) on October 28 2021 seeking fresh intervention.
“Following the timely intervention of your office in the captioned matter, Equity bank has once again resumed its campaign to illegally disposes our client of his property comprised in plot 4529, block 244, Kyadondo,"
"This is to seek your intervention in this matter to put a stop to the illegal acts of Equity Bank and further expedite investigations into the crimes that were reported by client to police.
Officials at CID Headquarters Kibuli told Shift Media News that this matter was duly investigated and closed. Meanwhile Harrison Busingye has opened a fresh case of criminal trespass against Excel Bailiffs & Auctioneers.
Shift Media News efforts to get Jimmy A. Mwangangi, the Head of Credit and Elizabeth Nayiga Wamala, the Legal Senior Manager were futile.