Booking.com

Tuesday, July 18, 2017

Should #Ugandans celebrate the fall of #Sudhir, #CraneBank?


In early 2004, I was among the ten old boys and girls of The Monitor that conceived the idea of establishing Weekly Observer newspaper.
We thought of two main things that would determine our success – capital and big stories. Although we had not printed any copy, President Museveni, on the account of the profiles of some of Weekly Observer founders and his hatred for the The Monitor, granted us an interview. Mind you, this was the time of agitation to remove presidential term limits and Museveni had not spoken.
An interview with Museveni in which he spoke about term limits solved our immediate need for a big story to introduce the newspaper on the market. Money to print the newspaper and to meet operational costs remained unresolved. Crane bank, owned by Sudhir Ruparelia, was one of the biggest advertisers in the media.
Our founding managing director, John Ogen Kevin Aliro, approached Sudhir, the chairman of Crane bank. After publishing and selling a few copies, Sudhir accepted to advertise with Weekly Observer. Crane bank also offered us an overdraft (which, of course, is a form of  loan).
Just like any business/businessman, Sudhir extracted positive coverage from almost all the main media platforms in the country because he offered adverts. That is what businesses such as MTN and Airtel have done.
Because of this relationship with the media, there are many things that Sudhir is suspected of have done that went unreported. Who would dare broadcast or write a negative story about one of their biggest advertisers? That would be like biting a hand that feeds you.
But the most significant point of this scenario for our policymakers is the absence of affordable startup capital in this country. Why on earth would any commercial bank hesitate to do business with a group that had proven credentials like we had at the beginning of The Observer newspaper? I remember New Vision printing for us on credit at least for the first two issues.
That is the gap that Sudhir and his Crane Bank sought to fill, of course for selfish interests! Do you remember a recent article by Justice George Kanyeihamba about missing Crane bank that The Observer published?
I honestly think commercial banks must adapt to the business environment in the country. I know many commercial banks find it rewarding to buy bonds and treasury memoranda because of the low risks involved. But that doesn’t grow business!
Applying an elitist (corporate) approach to an informal economy can be counterproductive. Salary loan was a monumental innovation. Maybe the regulator, Bank of Uganda, must also learn to innovate starting with waiving or completely removing some weird requirements for people to access financial services.
There was a time I attempted to open up a bank account for a small business and it took me nearly a whole day. Easing access to financial services is what made Greenland bank very popular. Instead of helping it, the government just killed it.
Of course there are many people who lost property to Sudhir, but I think we should separate his unethical practices from the real things he did to ease access to financial services.
After 31 years of the NRM experiment, Uganda remains an informal society. The NSSF told me in 2014 that of the estimated 15 million country’s workforce then, only 2.5 million were employed in the formal sector. The government (public sector) employed about 300,000 by that time.
But most scary was the fact that of the 2.5 million people employed in the formal sector, only 600,000 were regular contributors to the NSSF. What this means is that only about four per cent of Uganda’s population has social protection. In Malaysia, nearly 98 per cent of the population and 99 per cent in Singapore are on social protection schemes. Kenya has 11 per cent of its population saving for the future.
And instead of empowering people to save for their future, the NRM government introduced and is piloting Social Assistance Grants for Empowerment (Sage) through which it is giving Shs 25,000 ($7) to old people per month. Yes, it is seven dollars per month!
Therefore, the point I am laboring is that we must have a genuine conversation on how to ease access to financial services especially for people starting businesses. These handouts such as the Youth Livelihood Programme under the ministry of gender can only entrench patronage. Real solutions lie in making credit affordable and accessible. I think that is what young people want.
In my constituency (Kira municipality), I met some young boys who are making charcoal flat irons. All they need is about Shs 5 million because their market is demanding about 300 pieces a week but they don’t have the machine to produce that number. And even if I distributed all my earnings to groups like these, I can only cover a fraction.
That is what would make the Sudhirs heroes despite their unethical business practices.
THE OBSERVER

Should we celebrate Sudhir's collapse?

In early 2004, I was among the ten old boys and girls of The Monitor that conceived the idea of establishing Weekly Observer newspaper. We thought of two main things that would determine our success - capital and big stories.

1 comment:

  1. "I would like to say thanks for your sharing this useful information. Nice post keep it up. Hope to see you next post again soon
    Used cranes for Sale in Dubai

    ReplyDelete