By Benjamin Mwibo
Uganda Microfinance Regulatory Authority has warned the public against borrowing money from unregistered money lending institutions.
According to UMRA Executive Director Edith Namuga, there are many illegal money lending institutions operating country-wide with the purpose of taking the public off their properties.
“It had come to our notice as the Authority that some unlicensed people are conducting money lending business in total disregard of the provisions of the law. In reference to Section 84 of tier 4 of microfinance institutions and Moneylenders Act 2016 prohibits anyone from conducting money lending business without a license, “Namuga said on Monday.
Namuga strongly urged the public to always demand certificates of registration before engaging in money borrowing ventures with money lending companies.
” As the authority, we would like to inform the general public that tier 4 microfinance institutions and Moneylenders Act 2016 is now effective.
The authority has noted with concern the emerging unlicensed money lenders around the country carrying out operations in defiance of the sections under the tier 4 microfinance institutions and Moneylenders Act 2016 and accompanying regulations, “Namuga said while addressing journalists at the Uganda Media Centre Kampala.
UMRA legal manager Sheila Birungi advised potential business people wishing to Join money lending operations to seek property legal registration so that they are authorized to operate.
” The illegal money lending companies are taking advantage of desperate clients affected by COVID-19 pandemic financial stress and end up being cheated. We are therefore informing the general public that the authority has finalized plans to launch enforcement operations against all those operating outside the law as we encourage borrowers to transact business with only licensed moneylenders to avoid being into rungles and misunderstandings, ” Birungi noted.
Namuga added that there are only 950 licensed microfinance and Money lending institutions however among these 801 money lending businesses are approved by UMRA.
” UMRA is mandated to regulate, license, and supervise all the tier IV microfinance and money lenders in Uganda, most borrowers are ignorant of law and borrowing agreements. Some borrowers get off the payroll and get into arrears,” she added.
Namuga revealed that UMRA will expand its presence in Arua, Mbarara, Jinja, and Mbale as efforts to reach out to country-wide awareness.