Arua. The lucrative business of cross border trade between Uganda, DRCongo and South Sudan has lured various banking institutions to establish their branches here.
The latest is Equity Bank that opened its branch on Monday in Arua town, which is vying to become a City after it was listed among the fastest growing towns in the country. The two countries depend on goods like building materials, foods and beverages from Arua town.
So far, 13 commercial banking institutions and about 11 microfinance institutions, and about 15 forex bureaus have established their businesses here. While opening the bank on Monday, the Arua Branch Manager of Equity Bank, Mr Simon Avutia, said: “Arua has a unique ways of doing business because there is abundant hope and potentials of growth. This can only be done if you study the market well, handle customers with utmost care this is why we are here to offer more opportunities for the businessmen.”
Bank Manager of Equity Arua Branch, Simon Avutia speaking to the press after opening ceremony. All Photos by Felix
He said there was need for the staff to be aggressive in looking for business and follow the strategies of growing the branch. Equity now has 30 branches countrywide. The trade flow between Arua and Ariwara town in DRCongo is intense although the number of traders traveling here is not so high coupled with the products transported. But the value of trade flow is higher at $ 88, 176 per month compared to the value of significant products traveling from Ariwara to Arua of about $35,445 per month.
The population growth and over-reliance of Congolese and South Sudanese on banking institutions in Arua, is a blessing for the growth of the town. The two neighboring countries do not have adequate banking institutions and so the businessmen from there have accounts and forex exchanges with those established in Arua. In the past 15 years, there were about three commercial banks only.
The Mayor of Arua, Al hajji Issa Afeku, said: “This institution should be a source of socio-economic transformation for our people in terms of employment and offering affordable loans to business people who wants to expand their capital.”
The Parish Priest of Christ the King Church, Fr Pius Yobuta, while speaking at the function, said there was need for the banking institutions to uphold their values and targets of alleviating poverty by reaching out to the rural poor.
Fr Pius Yobuta, Parish Priest of Christ the King addressing bankers and customers during opening.
“If any banking institution can think of the last person in the village who sleeps on papyrus mat, feeds once a day and has a chicken and a goat, it would be great if financial advice could be given by such institution,” he said.
The Bishop of Madi and West Nile diocese, Rt Rev Charles Collins Andaku, said it was paramount for the bank to tap into the business potentials in the town and improve it further.
The bank intends to offer loans up to Shs 30 million for those who can be able to repay.
Bishop of Madi-West Nile diocese Rt Rev Collins Andaku cutting a tape during opening of the bank.
Bank of Uganda report indicates that Oraba, the dominant border crossing for Uganda’s informal exports during 2009 and accounted for $ 324.29 million. This was an increase of 8.7 percent from the 2008 figure. However, in 2010, there was a decline to $72.18 million of the total informal exports.
Vurra border in Arua recorded $ 90.90 million between 2009 and 2010 in exports, while imports were at $ 18 million. Equity has another branch in Adjumani district where majority of of the South Sudanese from Kajo Keji area accesses.
A Congolese truck loaded with goods from Arua Market.
Cross border trade situation
Survey by Rural Initiative for Community Empowerment (RICE), an NGO operating in the region indicates that Arua alone has about 1,394 traders-mainly women consisting of 72 percent as head household who depend on small cross-border trade with DRCongo. It also notes that overall women who trade between Arua to Ariwara earn profit of $ 6,101 and those from Ariwara to Arua earn & $8,667.