MAYUGE – The deputy resident district commissioner Mayuge, Trevor Solomon Baleke has issued an ultimatum to all money lenders in the district to return all national identification cards [ IDs ] confiscated from the borrowers.
According to Baleke, several of the money lenders in Mayuge town were using their clients’ national IDs as key collateral in the business that has seen many borrowers lose their IDs after failing to pay back the loans.
He warned: “It is an illegality for money lenders to confiscate such critical documentation of their clients including National IDs, ATM Cards, and passports as collateral for loans.”
Baleke who had summoned the money lenders at the district council hall told them, it is a violation of the laws, and also infringes on the privacy of the borrowers.
Recently, the Uganda Microfinance Regulatory Authority [UMRA] during a meeting with money lenders urged them to adhere to laws and regulations that govern their business.
In the 2016 Tier 4 Microfinance Institutions’ and Money Lenders Act, it is illegal to use Bank ATM Cards, passports, warrant books, and national IDs to secure a loan facility.
“We are therefore giving you up to December 31, 2022, to return to the owners all the national identity cards under your custody,” he directed.
The creditors struggled to convince the RDC to appreciate that several borrowers do not have collateral worth borrowing, save for the national IDs to secure a loan, but all in vain.
The RDC in turn wondered why would a money lender advance funds to an individual who does not meet the set criteria.
“Why would you lend money to a person who doesn’t meet the criteria? That is the biggest mistake you make and you end up having issues with your clients which sometimes poses a security threat in our areas,” he added.
He directed all money lenders in the district to provide all their details such as business addresses and other important data to help guide security in the district.
He also warned them to display their operational licenses in their offices, as well as publish the interest rates to guide the borrowers.
The meeting followed a series of community engagements in which the local population decried to the authorities about the exorbitant interest rates charged by the money lenders, extortion and confiscation of their important documents.
The meeting also came at the back heel of multiple complaints to the regulators of the sector countrywide about the increasing number of court cases, which has also attracted other office bearers intervening to save the victims of the money lenders to the harsh conditions.
Recently, Prime Minister Robinah Nabbanja intervened in a court case amidst incidental pandemonium from the Judiciary while the public court praised her for intervening in a case to save Getrude Nalule, a mother of eight who was on the verge of losing her land to a money lender Godgfrey Bazaale following her failure to clear her an outstanding debt of Shs 2.8 million.
Last Bazaale was last week remanded to Luzira Prison on charges of criminal trespass, malicious damage to property, and forcefully entry after the money lender and others still at large destroyed Nalule’s perimeter wall after she refused to vacate the land she was staying on in Namungona, Kampala, Bazaale, having tried to forcefully sell it at Shs 10mln to recover his money.
https://thecooperator.news/umra-ursb-summon-money-lenders-for-crucial-meeting-in-kampala/
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