profit, if any, they will earn if they take out a business loan and then fully service that loan. entrepreneurs must also have a good grasp of the risks that they run. business revenues are often volatile, yet loans must still be serviced even when revenues are lower than expected. will an entrepreneur still be able to service his or her loan if the business suffers a fall in revenues? these are the types of questions which entrepreneurs must be able to answer before they apply for a loan. i urge the graduates of this pioneer class of the academy to apply the skills acquired during the programme in their businesses and personal lives as well as share the knowledge acquired with the wider business community to bolster entrepreneurship. to conclude i wish to take this opportunity to congratulate orient bank, the management of makerere university business school and the graduates upon successfully completing the training programme. i thank you. louis kasekende ( phd. ) deputy governor

the bif and saif funds. because the charters and operations of banks and thrifts have become so similar, it makes no sense to continue the separate funds. separate funds reflect the past, but neither the present nor the future. merging the funds would diversify their risks, reduce administrative expenses, and widen the fund base behind an increasingly concentrated banking system. most importantly, the federally guaranteed insurance coverage provided to the two sets of institutions are identical, and thus the premiums need to be identical as well. under current arrangements, the premiums could differ significantly if one of the funds fell below the designated reserve ratio of 1. 25 percent of insured deposits and the other fund did not. should that occur, depository institutions would be induced to switch charter to obtain insurance from the fund with the lower premium. this could distort our depository structure. the federal government should not sell an identical service, like deposit insurance, at different prices. 2. statutory restrictions on premiums. current law requires the fdic to impose higher premiums on riskier banks and thrifts but prevents it from imposing any premium on well - capitalized and highly - rated institutions whenever the corresponding fund's reserves exceed 1. 25 percent of insured deposits. the board endorses the fdic recommendations that would eliminate the statutory restrictions on risk - based pricing and allow a premium to be imposed on every insured depository institution, no matter how well capitalized and well rated it may be or how high the fund's reserves. the current statutory requirement that free deposit insurance be provided to well - capitalized and well - rated banks when fdic reserves exceed a predetermined ratio maximizes the subsidy provided to these institutions and is inconsistent with efforts to avoid inducing moral hazard. put differently, the current rule requires the government to give away its valuable guarantee when fund reserves meet some ceiling level. this free guarantee is of value to banks and thrifts even when they themselves are in sound financial condition and when macroeconomic times are good. at the end of last year, 92 percent of banks and thrifts were paying no premium. included in this group were banks that have never paid any premium for their, in some cases substantial, coverage and fast - growing entities whose past premiums were extraordinarily small relative to their current coverage. we believe that these anomalies were never intended by the framers of the deposit insurance fund act of 1996 and should be addressed by