KAMPALA. A cloud of fear and uncertainty is hovering over St. Balikuddembe Market (Owino) vendors, following the expiry of a deadline to clear an outstanding loan of Shs4.8 billion to Dfcu Bank.
The 3 acre land, which is facing auction comprises of Block 12, Plot 1081 and Plot 1339 was bought by the vendors with the intention of accommodating them during the then planned redevelopment of the market. It’s located in Mengo, Kisenyi.
The land is different from the one where the current market sits. The market which measures 7 acres is free from auction and its land titles are with the management of the market.
In a Monday press statement by Dfcu bank, the land would be sold soon because vendors have failed to clear the loan.
“…following the failure to redeem the land, Dfcu bank is now constrained to sale Block 12, Plot 1081 and Plot 1339 Mengo, comprising of the relocation land, to recover the outstanding loan. Please note that these are not the St. Balikuddembe Market titles,” the statement reads in part.
In the release, Dfcu notes that it didn’t immediately exercise its right to sell the land because SSLOA had requested for more time to secure investors to redeem the property.
Dfcu further revealed that SSLOA introduced two different investors who could not pay off the loan hence delaying the recovery of the loan. However, the financial institution didn’t reveal when it would take over the land.
SSLOA Secretary, Mr Adam Kakuba, confirmed the expiry of the deadline but said that the bank hasn’t auctioned the land yet.
“Although the deadline elapsed, Dfcu hasn’t sold off the land as some people are saying. As vendors, we are in talks with the bank to have their loan repaid. However, if we totally fail to repay their money, they will definitely take over our land in Kisenyi.” Mr Kakuba said.
He noted that they are collecting some money from vendors, which he said, would be remitted to Dfcu, adding that vendors are now paying in big numbers.
“The land can’t be sold without following the legal process and Dfcu hasn’t made any step to sell the land because we have explained to them that we are committed to repaying their money,” he said.
The debt arose from a Shs 3b loan, which Owino Market vendors acquired from Dfcu bank in 2011 for the lease of land, on which the market sits, from Kampala Capital City Authority (KCCA).
Management of the market staked their 4.5 acres of land in Kisenyi suburb as the security for the loan.
Mr Kakuba said that one of the conditions of the loan was to remit Shs. 250m per month.
He explained that they paid for eleven months until Kampala Capital Executive director; Ms Jennifer Musisi halted collection of revenue on grounds that the market had management wrangles.
As a result, Mr Kakuba said, they failed to repay the loan on the agreed time and hence it kept on accumulating.
On May 21, 2015, the market administration through SSLOA, signed an agreement with Dfcu bank over the repayment of the loan and hence it kept on accumulating.
The two parties agreed that the market administrators would pay Shs3 billion within 90 days from the date of signing the agreement.
However, vendors failed to repay the loan, forcing Dfcu to secure a court order to auction the land but vendors pleaded for more grace period.
The first court order was issued on August 23 2016 while the second one was issued on January 23 this year.
To recover the loan, Mr Kakuba said that they decided to sell one acre of the four acres of the land in question in 2015 to pay some money to Dfcu. The one acre was valued at Shs1.78 billion.
However, when they got a buyer, Mr Kakuba claims, he withdrew his interest.
“However, we later on learnt that Dfcu had sold the one acre but had cut the agreed upon price by Shs600 million. We sued them challenging the manner in which they sold the land but we lost the case. Court ordered that they should take over the remaining three acres if at all we failed to repay the remaining balance,” he said.
Efforts to get more information regarding the matter were futile.
But Mr Kakuba said that they have now got a developer to pay Dfcu Bank and construct the market so that they can pay him later.
KCCA spokesperson, Mr Peter Kaujju said that they were not concerned about the market because they don’t collect any revenue from it.
“Following the court case ruling IN 2014 over the ownership of that land, we lost the case and we were kicked out. The responsibility of the market is now in the hands of SSLOA,” he said.
SSLOA has a membership of 10,000 vendors while non-members are about 40,000. The registered SSLOA members are currently paying Shs1 million which management anticipates will help to clear the loan.