The Independent NEWS
Kampala, Uganda | THE INDEPENDENT | Members of different retirement schemes will be allowed to use part of their savings as collateral to obtain loans.
According to the regulation, members saving in retirement schemes licensed by the Uganda Retirement Benefits Regulatory Authority (URBRA) savers will be allowed to secure mortgages and loans using 50% of their savings.
The loan will be tied to the construction of cost-effective houses and purchasing land for construction and renovation of a house.
Speaking at the launch of the URBRA (Mortgages and loans regulations) under the URBRA Act of 2011,
on Tuesday at the Media Centre in Kampala, the Minister of Finance, Planning and Economic Development Matia Kasaijja said that they realized that when members receive their savings in a lump sum, they spend up to two-thirds of the savings to construct their homes, which may not get completed.
Martin Anthony Nsubuga the Executive Director of URBRA, the regulation will benefit the three million members who are saving in the different retirement benefits schemes in the country. He also said that the interest rate will not be high because they have discussed this with different banks.
According to the regulation, a member of the retirement benefits scheme is eligible for the loan if they have saved for not less than ten years. However, a member who has left employment or a member who has attained the retirement age of 60 years is not eligible for the loan scheme.
There are 64 retirement benefits schemes licensed by the Uganda URBRA as of January 2022.