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Health Workers to Access Loans at 15.5% Interest Rate Under New MOU

Speaking to journalists, Dr. Nathan Onyach, in charge of the operations of Regional and National Referral hospitals, said that like many professionals, health workers also suffered effects of the COVID-19 pandemic and have been frequenting his office seeking approval for loans, which often come at high-interest rates.
Dr. Diana Atwine signed the MOU on behalf of the Ministry of Health

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Health workers in government health facilities and the Ministry of Health (MOH) can now access loans of up to Shillings 200million following the signing of a Memorandum of Understanding (MOU) with Stanbic Bank on Monday.

Speaking to journalists, Dr. Nathan Onyach, in charge of the operations of Regional and National Referral hospitals, said that like many professionals, health workers also suffered effects of the COVID-19 pandemic and have been frequenting his office seeking approval for loans, which often come at high-interest rates.

He said that most of those seeking loans front school fees and failure to complete their housing projects. Dr. Onyach cited a health worker who recently retired but came back a week later seeking a contract to be able to complete his house.

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He explained that it is upon this background that the Ministry thought of options of helping the health workers leading to the signing of an MOU that will allow them access loans of up to Shillings 200m at an interest rate of 15.5%. 

He said given the fact that the general interest rate on the market goes to the highs of 25%, they sought an offer of less than 20%. 

Samuel Mwogeza, the Executive Head Consumer and High NetWorth at Stanbic bank, says that the new package will in addition to the loans, offer government health workers financial relief in case they are admitted with COVID-19. 

Each health worker will be entitled to a daily allowance of up to Shillings 200,000 for 20 days. 

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Also, in case a health worker dies, their family will be entitled to a funeral cash benefit of Shillings 2million to help with funeral arrangements. These packages he says were a result of various meetings with health workers to establish their biggest financial challenges.

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As this is happening, health workers under the Uganda Medical Association (UMA) are also on a countdown to November 6th when they plan to strike over low pay. 

Dr. Diana Atwine, the Health Ministry Permanent Secretary told the meeting this morning that instead of considering laying down their tools, health workers should consider accessing such cheap credit whose payback period is up to six years.

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In addition to brokering for health workers cheaper credit, Atwine says it’s important that they are taught financial discipline if they are to benefit from such initiatives.

Dr. Richard Idro, the President of Uganda Medical Association says they had earlier looked at giving health workers cheaper credit way before the pandemic hit. 

He says the association has a SACCO in which members access credit at less than the new offer at 15%.    

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