It is a tough time for Mobile app money lenders as the State Minister for Microfinance, Haruna Kasolo Kyeyune has advised the Uganda Microfinance Regulatory Authority (UMRA) not to license them.
Minister Kyeyune Kasolo made this directive on Tuesday at Hotel Africana in Kampala while in a meeting where stakeholders discussed important issues in the money lending business. He asked UMRA to be very careful and not to cause him problems because these mobile app money lenders don’t have addresses.
“Don’t issue licenses to mobile App-based online money lenders, you must bite what you can chew, do not cause me problems. Do you know where these online money lenders are?” Minister Kyeyune Kasolo said. And he later informed that he will call another stakeholder’s meeting to dissect the issue of online money lending.
In defense for this, the Executive Director of UMRA Edith Tusuubira said that her agency promotes a sustainable financial stability, and financial consumer protection. And pledged that the authority will continue supporting the growth of Tier 4 microfinance sector.
“The Authority will continue supporting the growth of the Tier 4 microfinance sector,” she said, adding that UMRA was established under the Tier 4 Microfinance Institutions and Moneylender Act, 2016, and is mandated to License, regulate, and supervise the Tier 4 sector, which constitutes of SACCOs, non-deposit-taking microfinance institutions, money lenders among others.
She continued to say that, to this end, UMRA licensed over 1802 institutions under the Tier 4 legal framework for the calendar year 2023, and also has put in place a toll-free complaint handling line 08001114499 for quick help and response.
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Additionally, while speaking at the meeting, the Chairperson of the Uganda Money Lenders Association Ben Kavuya asked UMRA to lift the current ban on the issuance of money lending licenses, saying some money lenders are operating illegally.
“We are now working illegally yet money lenders confusing the market have never been licensed,” he stressed. Furthermore, mobile app based money lenders have become a menace currently after illegally accessing data of their clients like contacts and they end up calling random people in the contact lists of their clients while demanding for loan servicing.
Most of them have also resorted to calling random people asking them to take loans from them. One can wonder how they got their number even when they have never subscribed to these money lenders. But the thing is, they obtain numbers from people’s contact lists.
Mobile App money lending business in Uganda is uncontrollably increasing and mushrooming so fast. This has left many Ugandans with no choice but keeping falling victims of the trickeries they use to lure them into getting unnecessary loans since the process is very quicker than banks and other money lending institutions.
