Money lenders elect new executive

By Our reporter

KAMPALA – Uganda Money Lenders Association has embarked an operation to weed out unregistered money lenders they claim have tainted the business.

The drive follows President Yoweri Museveni’ directive to the Attorney General to ensure that specific laws are introduced to criminalize the errant money lenders.  During his State of the Nation address and the opening of the fourth parliamentary year, President Museveni described money lenders and commercial banks as extortionists who are charging Ugandans high interest rates, leading them to lose valuable property after failing to service the loans.

“I am happy that the association now has newly elected leaders, a graduation from the interim leadership. We going to work with Uganda Microfinance Regulatory Authority (UMRA) to ensure money leaders operating illegally are licensed. Those who fail to comply will face the long arm of the law,” said Mr Medadi Muganzi, Secretary, Uganda Money Lenders Association (UMLA).

Speaking the UMLA annual general meeting at Hotel Africana Tuesday October 1^st, 2024, Muganzi pledged to work hand in hand with government to clean up the money lending sector.

CAPTION: Uganda Money Lenders Association members vote during their annual general meeting at Hotel Africana October 1st, 2024.  (Photo by Stephen Wandera Ouma)

According to Tier 4 Microfinance Institutions and Moneylenders Act, 2016, for one has to be licenced to operate as a money lender.

Mr Jonan Akandwanaho said the new executive is committed to work for the members interests.

“We shall all relevant office to ensure that our business is here to stay,” he said.

Ms. Christine Birungi was elected Vice Chairperson, Mr Cyprian Kabera (Coordinator), Mr Dedan Mutatina (Treasure), Mr Nobert Mugisha Arinaitwe (Publicity Secretary) and Mr Belata Muntu (Compliance Policing Secretary). Others elected are regional representative, Mr. Rogerus Katurebe (central), and Rogerus Ruhinda (western)

What the Public Must know about Money lending business in Uganda?

A money lending business should be a company registered with Uganda Registration Services Bureau (URSB) and licenced by Uganda Microfinance Regulatory Authority (UMRA) in accordance with the Tier 4 Microfinance Institutions and Moneylenders Act, 2016.

1. In money lending business, the money lender should have a postal and physical address of the company (Form 18).
2. A money lender shall issue a receipt to a borrower for every repayment made on a loan and keep records for a period of 10 years.
3. A money lender should give a loan agreement to a borrower to sign not a sales agreement.
4. A money lender shall not dispose off any collateral given by a debtor as a sale, pledge or collateral for the loan advanced to him, unless 60 days have passed since a written demand notice has been issued to the debtor requiring him or her to pay any outstanding monies on the money advanced.
5. A money lender may, before carrying out a sale of collateral by public auction or private treaty, undertake a valuation and obtain a forced sale value of the collateral to determine the market value of the property.
6. A borrower shall retain the right to pay any outstanding monies and costs to redeem the collateral before it is disposed off.
7. Where a money lender takes possession of collateral under a money lending agreement, he or she is under a duty to exercise the same care and diligence over the collateral in his or her custody as would a prudent owner do with the property.
8. Where a collateral in possession of a money lender is lost, damaged or destroyed, the money lender shall be liable to pay the value of the collateral, or the replacement value of the collateral, after deducting the amount of the principal and interest if any, outstanding within a reasonable time.
9. A borrower may, at any time upon request made in writing to the money lender, access information from the money lender.