By Prisca Wanyenya
Over 2000 residents from Tororo district in Kasoli village have petitioned Parliament over the impending eviction by DFCU Bank who accuse the locals of failing to service a loan worth Shs2.5Bn.
George William Muyanja, Chairman of Kasoli Tenants Sacco Limited while appearing before Parliament’s Physical Infrastructure Committee on Tuesday, said that they acquired a loan in 2013 to construct 250 housing units on the 5 hectares of land and 92 units have been completed.
However, the project was halted after the government revealed the land would be used for construction of Standard Gauge Railway (SGR) prompting the residents to stop financing their loan with hopes of receiving compensation from the government in three months.
Muyanja explained: “We realized we couldn’t pay the mortgage, unfortunately DFCU realized that there was failure to pay and they recalled the mortgages and they threatened to sell the houses. We tried to talk to them and we thought they were understanding. They told us to get a letter from SGR committing to pay up the money but we failed to get the letter as an assurance for them to leave us.”
The residents are asking Parliament to help to stop the ongoing eviction orders that had been passed and force SGR to either compensate the residents so that they are able to pay back DFCU or the government writes a letter of commitment that they would pay off the loan.
Documents submitted to the Committee indicate that on 19th March 2013 DFCU extended a loan amounting to Shs2.5Bn to the Sacco for the construction of 250 houses at 22% per annum. The borrowers also paid Shs37m in facility and an additional Shs37.5million in legal fees to the lawyers of DFCU for drafting the loan contract.
Sarah Opendi (DWR Tororo) who also tabled the petition before Parliament said Kasoli Housing was a real slum and the project was a model project that the government would learn and replicate same projects in other parts of Uganda but was messed up by the poor planners in government.
She said: “The people in charge of planning aren’t doing their work. Millions of shillings were spent in this project by the government and once the 92 houses out of the 250 houses were completed, SGR came in. If there was planning in this government we wouldn’t be here. The problem isn’t with the Kasoli Housing Tenant Sacco, it was the government failing to compensate people through SGR. There is no way you can continue servicing a mortgage when you know you are entitled to compensation.”
Roland Ndyomugyenyi (Rukiga County) said that a scrutiny into the documents reveal that at the time the loan was acquired, the government hadn’t registered the land in the names of Kasoli Sacco.
Hillary Lakwang (Ik County) also wondered how DFCU came to approve a loan when the Kasoli Sacco had no land title registered in its name remarking, “Before borrowing the loan, the borrowers should have brought the land title. This is like betrayal to Kasoli people. How did DFCU give you the loan knowing you don’t have the loan title?”
However, Timothy Kazibwe lawyer to Kasoli SACCO said the government admitted it was an oversight to transfer the mortgage title to DFCU Bank before transferring the land title to the Sacco.