East African Business Week

KAMPALA, UGANDA - Traders in Kampala will soon stop paying exorbitant monthly dues on shops and malls when the proposed Pearl Kiseka Mall is completed.
This was revealed during the Kampala City Traders Association's Annual General Meeting (AGM) in Kampala recently by Mr. Everest Kayongo, the Chairperson of the Association.
Speaking to the East African Business Week (EABW) in an exclusive interview, Kayongo said that the current arrangement that entails that a trader first pays a 'good will' fee before even paying the actual rent on a shop in the malls really strains traders.
"The current arrangement does not favour small businesses because after paying rent for a long period of time, delay or defaulting on a month's pay means the trader leaves the shop with basically nothing".
He said the new arrangement is intended to see small businessmen also own shops instead of spending all their profits enriching the already rich landlords.
"The arrangement with Pearl Estates is especially a good one that enables businessmen to also own shops and stop the habit of paying exorbitant monthly dues which change at any time as the Landlord wishes.
"With this, a trader makes a down payment of 20% on a particular shop then he/she can pay the other 80% upon completion of the mall and eventually owns the shop", Kayongo said.
He also said that the other option is that a trader pays a down payment of 20% then continues paying 20% every four months till the mall is completed.
He added that one can also pay the 20% down payment then uses the receipt as collateral to get financing from a bank to complete the remaining 80%.
Kayongo said that three banks; Kenya Commercial Bank (KCB), Stanbic Bank and United Bank of Africa (UBA) have already agreed in principle to provide these services to the traders. He clarified that their intention is not to kick landlords out of business, rather give traders an option to own a shop but at the same time make the landlords ease on the fees levied.
However, a trader who spoke to EABW on condition of anonymity said the cost of the shops on the building are higher than the average trader can afford.
"Most of the shops are priced at over $30,000 and $40,000 which is higher than what we small traders can afford. It is better we continue with the current arrangement".
 To this Kayongo said the long term expenses on rent alone can enable one own a shop on the mall.
"The money that a trader uses on rent for many years when cumulatively computed, could have easily secured them a shop in the city.
However, to own a shop in Kampala, you have to at least posses over $2m. This new arrangement therefore gives traders the chance to own shops without having to go through the hassle of acquiring them", kayongo said.
He also added that after a trader pays for the shop, he/she can rent out the facility and in turn become a landlord himself. According to Mr. Roland Naturinda, Assistant Sales and marketing Manager Pearl Estates, KCB is financing the construction process to tune of Ush14b ($7m).
Naturinda also disclosed that traders had already begun booking shops on the mall whose construction is expected to take 18 months.