Zombo’s quick financial money lenders, who have been holding hundreds of national identity cards as collateral for loans, have been directed to return these cards to their clients.
The directive was issued on March 19, 2025, during a meeting convened by the Zombo district security committee with financial money lenders at Paidha Town Council. The aim was to harmonize their relationship with the community through existing laws guiding their operations.
Addressing journalists after the meeting, Bruno Manano, the Assistant Resident District Commissioner (RDC) of Zombo, gave the money lenders a two-day ultimatum to return the confiscated identity cards.
“We have convened this meeting to ensure the money lenders return the confiscated national identity cards to their rightful owners. We are giving them until Friday to comply. People are unable to access services because their identity cards have been taken,” Manano said.
The Money Lenders Regulations, Statutory Instrument No.8 of 2018, explicitly prohibit the demand or acceptance of a national identity card or any other document establishing the identity or nationality of the holder as collateral for any loan.
Assistant RDC Manano also warned locals against depositing their identity cards as collateral for loans, emphasising that this unlawful practice prevents the community from accessing essential services like PDM funds, Emyooga, and more.
A section of leaders in Zombo has urged the government to intervene by regulating the interest rates charged by money lenders, to address consumer protection concerns and inflationary tendencies. Many licenced and unlicenced lenders impose exorbitant interest rates ranging from 10% to 30% per month.
Over the years, Uganda has seen remarkable growth in Savings and Credit Cooperative Organisations (SACCOs), commercial banks, and financial money lenders, which serve as vital financial service providers for individuals and communities.
In Zombo, more than 20 quick financial money lenders are spread throughout the community, offering loans with minimal red tape. Many of these financial money lenders, commonly known as “Now Now,” reportedly use clients’ identity cards as collateral for loans.
The issue arises when clients default on the loan repayment terms after depositing their national identity cards as collateral.
At the meeting, Robert Musinguzi, a representative from Agafi Finance in Paidha Town Council, acknowledged some progress and challenges in their business operations, urging locals to take back their national identity cards from their offices.
He pledged cooperation with the government and the community in carrying out their business activities in the area.
The money lenders claim that many clients are failing to reclaim their identity cards, but they have assured that the cards will be returned to their respective owners as directed.
