KAMPALA, June 6 (Xinhua) -- Ugandan President Yoweri Museveni on Wednesday said the government will capitalize microfinance institutions in a bid to reduce the cost of credit that manufacturers can borrow.
Museveni, while giving the State of Nation address to Parliament, said when the institutions and the Uganda Development Bank are recapitalized, they will offer credit with an interest rate of 12 percent per year.
Interest rates in commercial banks in the country are currently over 20 percent.
Museveni said manufacturers would be able to access the cheap credit compared to the market rate. He noted that the move is intended to boost industrialization in the country.
"Through enhanced micro-finance, we are going to solve one of the bottlenecks -- absence of low-interest money for manufacturing. The privatization of commercial banks failed to solve the problem of high interest-rates," Museveni said.
He said farmers would also access the credit in order to transition from subsistence to commercial farming.
