Munyonyo — UGANDAN Investors in the oil sector could continue lose out if the banks continue to frustrate them, the Minister for Energy and Mineral Development has said.

While addressing Chief Executive Officers last week at the 3rd summit of Africa Management forum in Kampala recently, Mr Daudi Migereko said the banks in Uganda are demanding excessive security to individuals in order to offer loans, a situation, which he said had compelled many to bow out of business.

"Where an individual wants say $5 million, the banks ask for security worth $7 million many cannot afford this," he said. He said financial institutions are investing more in Treasury bills than empowering individuals with capital to set off the economy.

Mr Migereko said the banks should consider charting a way forward with the government instead of failing such a productive job creating sector.

However, top players in the financial industry said their banks were keen to partner with investors in ways that will help to develop the industry.

Standard Chartered Head of Corporate Communications, Mr Hebert Zake, said the level of collateral that the banks would request to secure a specific lending would depend on the business of the potential borrower, its management, industry, credit, financial and other risks inherent in the borrower's business and environment of operation.

"The riskier the borrowing proposition the higher the cost of borrowing and indeed the more collateral required as security" he said. An official in the research department at the Bank of Uganda, Mr David Kihangire, said the coming of the credit reference bureau soon would be a permanent solution for such categories of borrowers.