East African Business Week (Kampala)
David Mugabe
14 April 2008
Kampala — Ugandans without ready cash who intend to buy shares in the Safaricom initial public offer (IPO) have a chance to a quick loan facility.
Standard Chartered Bank through its smart credit personal loan product is offering unsecured personal loans for salaried employees without the need for any collateral to buy into Safaricom.
"We understand the urgency the purchase of shares brings to intending buyers. In this regard, we shall ensure we process all these applications as priority applications and ensure that all conforming applications get their money within 36 hours. We are willing to guarantee as many subscribers as possible," said Ms Grace Muliisa, Standard Chartered Bank general manager for unsecured lending last week.
Standard Chartered Bank, Uganda's oldest bank joins other institutions like Kenya Commercial Bank that are offering credit lines to Ugandans who are interested in buying into Safaricom. Muliisa said the bank had a track record with the salaried employees clientele and the institution would be ready to review individual applications outside the salaried scheme as and when they come.
Safaricom, East Africa's most profitable company offered its shares to the public starting March 28 to April 23. The IPO that is generating some sustained increased interest is embracing the entire East African region. But access to ready and cheap finance remains a big challenge to Ugandans with financial institutions offering credit at very high rates and with a lot of red tape alongside.
Even the Standard Chartered Bank's offer at 25.5% is still somewhat high end for the average borrower. The bank's officials say borrowers are prequalified from the beginning because of the status of their unsecured salary.
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