Minister Kyeyune to UMRA: Don’t issue licences to online money lenders

Kampala, January 30, 2024 – The State Minister for Microfinance, Haruna Kasolo Kyeyune has advised the Uganda Microfinance Regulatory Authority [ UMRA  not to license online money lending platforms, saying it is not easy to locate their physical addresses.

Minister Kyeyune made the call on Tuesday at Hotel Africana in Kampala during an engagement meeting where key stakeholders discussed pertinent issues in the money lending business.

“Don’t issue licences to App-based online lenders, you must bite what you can chew, do not cause me problems. Do you know where these online money lenders are?” Kasolo asked.

The minister pledged he would soon convene another stakeholders’ meeting in Kampala to discuss the sensitive issue of the online money lending platforms.

While speaking during the meeting, the Executive Director of UMRA Edith Tusuubira said her agency promotes a sound and sustainable non-banking financial institutions’ sector and enhances financial inclusion, financial stability, and financial consumer protection. “The Authority will continue supporting the growth of the Tier 4 microfinance sector,” she said.

Tusuubira said 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 consists of SACCOs, Non-deposit-taking microfinance institutions, self-help groups, and money lenders.

To this end, she said, UMRA licensed over 1802 institutions under the Tier 4 legal framework for the calendar year 2023, and also came up with some developments, and has put in place a toll-free complaint handling mechanism 08001114499, for this purpose.

However, she said the Authority has observed some of the key concerns such as high-interest rates charges, over deductions in payroll lending products, failure to disclose all the charges at the point of loan offer, use of National IDs as collateral, and sales agreements, among other things

Also speaking during the meeting, the Chairperson of the Uganda Money Lenders Association Ben Kavuya asked UMRA to lift the current ban on issuance of money lending licences, saying some money lenders are operating illegally. “We are now working illegally yet money lenders causing confusion in the market have never been licensed,” noted Kavuya.

Jackline Mbabazi, the Executive Director of the Association of Microfinance Institutions of Uganda [AMFIU] was among the invited stakeholders who attended the meeting in Kampala.

https://thecooperator.news/umra-cautions-money-lenders-after-murder-of-asian-businessman/

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