By Kezekiah Mbogo Jr
The leadership of North Bukedi Cooperative Union [NBCU] has petitioned President Museveni begging him to restrain Housing Finance Bank from strangling them dead. NBCU Chairman Faruk Gundi says they took a Shs400m loan from HFB in 2003 and have failed to pay because of poor agricultural performance. Gundi says they have been struggling to pay but HFB have been very unwilling to treat them leniently and the debt has stagnated at Shs400m yet his members are sick and tired of endless repayment and might harm debt collectors from HFB who keep delivering reminder notices to their Mbale offices.
The 2003 HFB debt was contracted in order to construct the Union House located in Mbale Town. NBCU Chairperson Farouk Gundi says that they are in financial crisis to clear some of these outstanding bank debts yet they badly need to recapitalize the Union and revamp some ginneries that have remained non-functional for years. “The huge debts continue to cripple the operationalization of the Union but attempts to petition President Museveni to bail out the Union from collapsing over debts and lost properties during the insurgency haven’t yet yielded,” Gundi said in an interview with Mulengera news Bukedi/Elgon correspondent.
“We have moved up and down to follow up a pledge but unfortunately no response at the moment. The Union is slowly paying its loans from rent acquired from housing estates being occupied by Busitema University. The Union is also constrained by the falling cotton prices [fluctuations] and low cotton production,” he said. The Ministry of trade and Industry had cleared Shs11bn in terms of war claims to be paid by the Ministry of Finance in order to off-set some of these debts but unfortunately this pledge has not been honored.
“The Union leadership is making a follow-up to that effect so that the ministry honors payments. The trade Ministry made verifications and found it prudent for the Union to be paid for the lost properties during the insurgency but this has taken forever,” painfully explains the chairman arguing it’s important that HFB is politically pushed to consider writing off the debt or reconstruct the repayment terms.
During the insurgency several ginneries were vandalized and Lorries taken by the army, leaving the Union almost naked with no assets at all. The few remaining are non-functional because of neglect and inadequate capitalization.
The Union’s future remains bleak over debts that are choking the Union and yet NBCU is among the major ginneries that are slowly collapsing. Ladoto, Bulangira, Kibuku, Kakoro are among the ginneries that collapsed due to various reasons. Most farmers in the cotton growing districts of Pallisa, Kibuku, Butebo and Budaka have lost morale of cultivating the crop because of the low prices. This has rendered would-be busy ginneries redundant despite GoU efforts to offer incentives like purchase of pesticides spray pumps and fertilizers. Officials said that the loan facility from Housing Finance Bank was done in accordance with Annual General Meeting resolution which allowed management to borrow up to Shs3bn but everybody is now regretting ever taking up the HFB loan that is turning into a curse. (For comments, email us on mulengera2040@gmail.com).
