Govt To Decide On Fate Of ‘Fraudulent’ Online Money Lenders

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The government will make its final pronouncement on whether it will resume issuing operating licences to online/digital money lenders next week, the Uganda Microfinance Regulatory Authority (UMRA), has revealed.

Ms Racheal Vanesa Nakawoya, the manager for microfinance institutions at Umra, yesterday told this publication that the State minister of Microfinance, Mr Haruna Kyeyune Kasolo, who stopped them (UMRA) from issuing licences to online money lenders would make a final pronouncement on the same matter next week.

“We shall have a meeting next week on Wednesday at Hotel Africana starting exactly 2pm with these online money lenders and other stakeholders, which will be attended by the minister who will make his final directive,” she told online money lenders in a zoom meeting on Wednesday.

On January 29, Mr Kasolo directed UMRA to halt issuing any licence to the online money lenders because their business is unclear.

He said: “Unlike other money lenders who have a clear location, these online money lenders are untraceable and this has given them leeway to steal from Ugandans. I can’t manage them, we need to study them and if there is any new application, do not approve it for now.”

During their annual general meeting on Tuesday, a section of money lenders under their umbrella of the Uganda Money Lenders Association (UMOLA) criticised the government’s ban on digital money lenders.

UMOLA members led by their Board Chairperson Mr Ben Kavuya said that not all online money lending businesses are not registered.

“I don’t think the ban is the way to go…those having legal businesses should be allowed to operate and consultation should be held,” he added.

Guidelines

Last year, UMRA’s executive director, Ms Edith Tusubira, announced that the authority would start implementing the digital lending guidelines, which they developed in August last year, with an aim of regulating the online money lenders.

These guidelines were developed in response to a public outcry, which Daily Monitor highlighted in its April 5, 2023 special report, where online money lenders were charging exorbitant interests. However, the State minister for Microfinance, Mr Haruna Kasolo, suspended the licensing processes.

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