All not so quiet on the business front as cyber crime slowly takes shape

Stanbic Bank’s staff attend to a client during a banking expo in Kampala. The bank recorded 800 fraud incidents between January 2016 and January 2017. FILE 

By BERNARD BUSUULWA

In Summary

• Stanbic Bank Uganda, the country’s largest lender with total assets worth Ush4.5 trillion ($1.2 billion) by close of December 2016, recorded 800 fraud incidents between January 2016 and January 2017.
• Local entrepreneurs blame the fraud in banks on increasingly difficult economic conditions while corruption and political impunity are blamed for low business confidence in some sectors.
• Figures compiled by the Uganda Bureau of Statistics (UBOS) show the total number of serious crimes investigated by police increased from 7,416 in 2012 to 18,048 in 2013. In 2014, the total number of serious crimes investigated by the police rose to 20,475.

Murders of high profile individuals in Uganda since November 2016 have no doubt shocked the political and security circles. But their impact, and that of other less publicised incidents, is being felt in the business community.

Killers on motorbike shot dead Sheikh Major Muhammad Kiggundu and his driver, Stephen Mukasa in November last year after trailing him from his Kampala home on a Saturday morning. The killing followed at least 10 other previous murders, almost in similar fashion that mainly targeted Muslim clerics.

On March 17, Andrew Felix Kaweesi, the Assistant Inspector General of Police and Police spokesperson was gunned down together with his bodyguard and driver a few metres away from his residence in Kulambiro, a Kampala suburb.

READ: The killing of Uganda's police spokesman outside his home

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While the high profile killings drew attention to crime and day time murders, significant numbers of non-violent crimes have hit the business community hard, with some banks feeling the heat.

Stanbic Bank Uganda, the country’s largest lender with total assets worth Ush4.5 trillion ($1.2 billion) by close of December 2016, recorded 800 fraud incidents between January 2016 and January 2017.

Majority of these were instigated by external parties. About 650 fraud incidents were foiled during this period, according to internal security data compiled by bank staff.

Around 95 per cent of the reported fraud incidents were attributed to use of fake currency notes and three per cent were related to cases of impersonation, among others. An estimated Ush600 million ($164,347) was recovered from fraud incidents detected in the bank between January 2016 and January 2017.

“We have seen a rise in the number of fraud attempts initiated by some clients. We have tried to block them but more keep coming up. I recently persuaded the Uganda Bankers Association to set up an anti-cyber crime committee to guide the industry on ways to tackle this problem,” said Patrick Mweheire, managing director at Stanbic Bank Uganda.

The total number of cyber crime cases reported to police increased from 61 in 2014 to 137 in 2015, according to half year crime data for the first six months of 2015 published by the Uganda Police Force.

“There is zero tolerance for fraud in the banking industry. In case the police is involved in any fraud incidents, we have worked with the institution to investigate such matters and get to the bottom of the problem. Security in the banking industry is not negotiable and all branches are always under tight guard,” observed Fabian Kasi, Centenary Bank Uganda Ltd managing director.

Local entrepreneurs blame the fraud in banks on increasingly difficult economic conditions while corruption and political impunity are blamed for low business confidence in some sectors.

“Some customers feel commercial banks are squeezing them hard with double-digit interest rates that are reviewed at short notice, frequent foreclosures and high transaction charges. Unwillingness by banks to restructure struggling loans under a tough economic environment has made life hard for many business borrowers and this has tempted some people to hit back at the banks,” said Oscar Ofumbi, who is in the transport and education sectors.

“We have become more alert on personal safety in many ways including how one behaves while handling financial transactions,” added Mr Ofumbi.

Equally worrying is what some see as widespread corruption that appears to be condoned by the regime and crime abetted by the police.

“As a result, it has become difficult to report certain crimes to the police because some officers connive with highly connected offenders to kill cases, sometimes in the victims’ presence! Because of such circumstances, we feel scared investing a lot these days due to fear of some rogue but protected elements that interfere with lucrative projects and are capable of doing harm to any business person who does not yield to their demands,” said Edward Kigongo, chief executive of Ken Group, a stationery supplier.

When contacted for comment, the police spokesperson requested more time to respond to our questions.

Figures compiled by the Uganda Bureau of Statistics (UBOS) show the total number of serious crimes investigated by police increased from 7,416 in 2012 to 18,048 in 2013. In 2014, the total number of serious crimes investigated by the police rose to 20,475.

The number of burglary cases investigated by police increased from 1,842 in 2012 to 3,846 in 2013.

However, the overall number of burglary cases investigated by police dropped to 3,668 in 2014, UBOS data shows. Homicide cases investigated by the Police rose from 759 in 2012 to 2,326 in 2013. Overall homicide cases investigated by police increased to 2,421 in 2014.