Why Stanbic, Centenary Remain Most Trusted Banks in Uganda

Banks Stanbic, Centenary and DFCU have in 2020 been reported to be the leading banks in deposits, offering loans to clients and the efficiency with which they offer services to the vast majority of their clients across the country.

Reports Published by the different financial monitoring institutions have in the past one month positioned Stanbic bank and centenary as the top most banks in retaining clients deposits in the past financial year while similar reports leave both banks in the first and second positions in offering loans to clients.

For instance, Stanbic Bank increased its customer deposits from UGX 3.9 trillion shillings in 2018 to UGX 4.7 trillion in 2019, leading with a market share of 20.51%. Fabian Kasi’s Centenary Bank comes second with UGX 2.53 trillion and an increase of 10.96% in the amount of money deposited. ABSA, Standard Chartered Bank and DFCU come in the third, fourth and fifth position respectively.

The top 10 banks control up to 81% of the customer deposits within the country.

The same banks lead with in the amount of loans deposited by the different clients. The banks have retained such positions in the past three years. But what are some of the reasons for such banks retaining the top positions?

Well as all banks have branches across the country, some of the banks despite having great clientele relations remain with less operating resources while others are still struggling with the online payment and transaction systems.

It is upon such background that many banks are remaining backward, and unable to transact in the hard to reach localities in the country leaving them with limited transactions. Online transactions according to a report by Stanbic Bank in 2019 indicated that more clients ignored banking halls and started using the digital and online banking systems easing transactions.

Stanbic Bank, by October 2019 registered up to 80 percent of their transactions on digital platforms, with more than 1,000 agents across the country.

Such agents offer accessibility of the financial systems and transactions across the country which eases savings, loan payments and deposits. For instance, both centenary and Stanbic have agents using digital platforms in three different Kalangala Islands including Buggala, Kuye and Jaana.

“This has enabled us to engage in the repayment of loans the initiation of transactions to pay all fishermen who engage in business with us.” Says Kassim Lutwaama, a resident on Bubeke Island, Kalangala District.

Other district such as Buvuma, Adjumani and Bukwo still depend on Banking halls with only Stanbic and Finance Trust banks providing financial services. “That also leaves many of the financial institutions without offering services to the people.” Says Ismail Kayiira, a financial expert in Kampala.

For other financial institutions to increase deposits and loans, they need to engage government for business. For instance, Stanbic, formerly Uganda Commercial Bank mostly engages in business with governments especially at the local government levels.

The bank has branches in more than 70 districts across the country with accounts used to transact on business on behalf of the Local Governments with direct government transfers of an average UGX 18 billion deliberated to the districts annually.

With Centenary being a church based and rural development bank, most local people engage in transactions with such bank for loans and savings, “For it is trusted because of its primary and founding institutions.” Says Richard Ssemugenyi, one of the bank’s clients.

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