Thugs Charging Poor Ugandans 20% On Loans Must Be Crushed - Museveni Goes Bare Knuckles On Money Lenders

By Kundu Ronald

President Yoweri Kaguta Museveni has unleashed his wrath on money lenders in Uganda, expressing outrage at their exorbitant interest rates of 20% per month. This scathing condemnation came during the NRM Caucus meeting held at Entebbe State House on Thursday afternoon, where Museveni directed the Minister for Finance to take immediate action by issuing a statutory instrument regulating the interest rates charged by money lenders.

Museveni's fiery statement left no room for ambiguity: "These moneylenders who are causing suicide among our young people, who allows them to operate? Why should someone charge 20% interest on a loan per month? This must stop," he declared.

The Ugandan President's comments reflect growing concern over the practices of money lending institutions in the country, particularly their impact on vulnerable borrowers. High-interest rates, often coupled with aggressive debt collection tactics, have pushed many Ugandans to the brink of financial ruin, with some resorting to desperate measures such as suicide.

In response to these concerns, the Uganda Microfinance Regulatory Authority (UMRA) has outlined specific regulations governing money lending businesses. According to UMRA:

- Money lending businesses must be registered with the Uganda Registration Services Bureau (URSB) and licensed in accordance with the Tier 4 Microfinance Institutions and Moneylenders Act, 2016.

- Money lenders must maintain a valid postal and physical address for their companies.

- Borrowers are entitled to receive receipts for every repayment made on a loan, and money lenders must keep records for a period of 10 years.

- Loan agreements, not sales agreements, should be provided to borrowers for their signature.

- Money lenders are prohibited from disposing of collateral given by a debtor as a sale, pledge, or collateral for the loan advanced until 60 days have passed since a written demand notice has been issued to the debtor.

- Valuation and determination of the market value of collateral should be undertaken before its sale.

- Borrowers retain the right to redeem collateral before it is disposed of by paying any outstanding amounts and costs.

- Money lenders are obligated to exercise due care and diligence over the collateral in their custody.

- If collateral in possession of a money lender is lost, damaged, or destroyed, the money lender is liable to pay the value or replacement value of the collateral, deducting any outstanding principal and interest.

- Borrowers can request information from money lenders in writing at any time.

President Museveni's strong stance against money lenders charging exorbitant interest rates highlights the urgent need for regulatory intervention to protect vulnerable borrowers in Uganda. As the nation awaits the forthcoming statutory instrument, the message is clear: the exploitation of Ugandans through predatory lending practices will not be tolerated.