Equity Bank Uganda staff under probe for alleged $16m loans fraud

Tuesday March 12 2024

People line up to withdraw money at an Equity Bank ATM at Kabalagala along Ggaba road in Kampala, Uganda. PHOTO | DAILY MONITOR | NMG


Some Equity Bank Uganda Ltd employees are under investigation for alleged fraud involving stock loan and agent float financing, Monitor reported.

Stock finance is a lending service that allows businesses to borrow working capital against their goods. Agent float loan allows bank and mobile money agents to access unsecured loans for their operations.

Monitor said the amount being investigated is approximately Ush65 billion ($16.7 million).

“We regret to inform you that we have recently identified a possible fraud on our stock loan and agent financing products,” the bank said in a statement addressed to its customers and shareholders.

“People of interest, including a few of our staff and customers, are currently assisting with investigations by the relevant law enforcement authorities.

“We hold ourselves to the highest standards of accountability and transparency, and person found to be responsible, whether through fraud or errors of commission or omission will be fully addressed in accordance with the policies, procedures and ethical values of the organisation and, where appropriate, the laws of the country,” reads the bank’s statement, a copy of which Monitor has seen.


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The bank, however, says its operations continue seamlessly.

“Customers continue to access loans across all our branches countrywide and banking channels.

“The Board of Directors and management are committed to resolving and concluding this matter, and we continue to focus on our purpose of transforming lives, giving dignity and expanding opportunities for wealth creation,” adds the bank.

Dr Fred Muhumuza, a banking expert and board member of a bank, told Monitor that in a situation like this, depositors’ savings are not affected except the bank’s bottom line.

“If it turned out that some money has been lost, it will be the bank to suffer the loss and not the depositors because it is a lapse on the bank’s side,” says Dr Muhumuza, adding “Until then there shouldn’t be cause for alarm because it’s an investigation into a suspected fraud – still early days.”

The director of research and policy at Bank of Uganda, Dr Adam Mugume, said: “We are not aware of this possible fraud.

“But the audited accounts of the bank as of December were quite healthy. And the loan book was good. Will find out more but I doubt whether this wasn't malicious reporting.”

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Equity Bank Uganda, a subsidiary of Equity Group Holdings Plc, is one of the leading banks in Uganda with an asset base of Ush3.5 trillion ($900 million) as at 30th September 2023. The lender has continued to expand its footprints and currently has a network of 50 branches, more than 9000 Qui Duka agents and 58 ATMs spread across the country and serving over two million customers.