Why banks in Uganda don’t go bust

Daily Monitor:

A friend of mine in the UK asked me the other day whether the credit crunch had caused any banks in Uganda to go bankrupt. I said that, to my knowledge, none had done so. It then got me thinking as to why this might be so. Surely the Uganda economy is not more robust than the UK, USA or Iceland. Why are banks here apparently immune to the world recession? Two days ago I had an experience that gave me a theory that might answer the mystery.

I was visiting my local Barclays branch to withdraw some money. Despite there being just three people in the queue ahead of me, I waited at least 20 minutes for a teller to become available. He was a scruffy gentleman with a shirt that I imagine had once been white. This teller appeared to have problems with the computer system and it took another five minutes before he finally located my details to correspond with the withdrawal form that he had insisted that I fill out.

He then asked me some personal questions presumably for identification purposes. I was becoming impatient and suggested that he might be embarrassed by this ‘service’ he was providing especially as I pay Shs20,000 per month for the privilege of being a “Prestige customer.” I had, of course, committed the worst possible sin; I had dared to complain and I was subjected to Barclays unique brand of ‘customer service’ as a result.

Having heard the signs of discontent from a customer, any semblance of management melted away and everyone in the branch suddenly appeared very busy and unable to deal with my concern. I was left in the hands of the man with the dirty shirt. He decided to question the authenticity of my signature.

When I muttered my disgust under my breath, he immediately ushered in the armed security guard lurking outside presumably to have me escorted off the premises. When he saw my expression he thought better of it and, instead, told the security guard to go and photocopy my ATM card.

Many of my visits to Barclays have been similarly unhelpful to my blood pressure although I concede that this is the worst example, and I hear horror stories from people banking with other banks in Uganda.

So, I started thinking about that question from my friend in the UK. It is no wonder banks here do not go bankrupt (except for reasons of mismanagement and corruption as a few years ago). Firstly they will only lend to people who they are absolutely certain will pay back in one form or another which is where they are a lot more sensible than their European counterparts. Having lent to someone who probably didn’t need to borrow in the first place, they add on interest and charges for the loan that would make a common thief embarrassed to charge and they slap on bank charges, ledger fees, you name it, seemingly for simply daring to breathe within one of their branches.

Above all, though, as my Barclays horror story depicts, they are prepared to have you removed from their building at gunpoint if you try to extract your own money out of your own account; the concept that it wasn’t actually the bank’s money that I was trying to access seemed to confuse the man with the dirty shirt. How can a bank go bust if it hangs onto the customer’s money as if it were its own?

These avaricious institutions may, after all, go out of business because they have no business to run as we all decide that we would rather risk thugs visiting in the middle of the night to steal our wad from under the mattress than face the public humiliation of a visit to our local bank.