Gov’t orders immediate return of National IDs held by money lenders

He assured the public that measures are being put in place to ensure fair lending practices and to protect borrowers from exploitation.

The government has issued a directive mandating money lenders to return national identification cards (IDs) they have been holding as collateral.

This announcement was made by the Minister of ICT and National Guidance, Chris Baryomunsi, during a press briefing on recent Cabinet decisions on June 28,2024.

Minister Baryomunsi emphasized that the practice of using National Identification Cards as collateral is illegal.

“It is unlawful for anyone to require a borrower to surrender their ID,” he stated. “Those who are holding people’s IDs should return them as soon as yesterday. This instruction applies to all money lenders, Savings and Credit Cooperative Organizations (SACCOs), and any institutions involved in lending activities.”

The government is urging all money lenders to comply with this directive immediately.

“If you are holding any IDs, please return them and negotiate afresh the kind of collateral the borrower should deposit,” Baryomunsi reiterated.

He underscored the importance of adhering to legal practices, noting that holding onto someone else’s identification documents is a clear violation of the law.

The Minister also highlighted the government’s responsibility to protect citizens from predatory lending practices.

“We are conducting research and consultations to establish effective safeguards and regulate the interest rates charged by lenders,” Baryomunsi said.

He assured the public that measures are being put in place to ensure fair lending practices and to protect borrowers from exploitation.

In addition to addressing the issue of national IDs, Minister Baryomunsi warned the public about the rising threat of online scammers.

“We want to caution the public to be careful. While we promote technology and encourage people to go digital, there are conmen who aim to fleece people of their money,” he warned.

He advised the public to engage only with properly licensed money lenders. “Anyone can just go behind a computer or a phone and claim to be a money lender. We are studying this issue and will work with the Bank of Uganda and the Uganda Communications Commission to issue further guidance on online lending services,” he added.

During the briefing, Minister Baryomunsi also addressed issues regarding the Appropriation Bill. The President has returned the bill to Parliament, citing unauthorized alterations that divert UGX 750 billion from the government’s set priorities. “These alterations fundamentally distort what the government plans to do in the next financial year,”Baryomunsi explained.

“The government remains committed to ensuring that budget allocations reflect its strategic goals and priorities. We will work closely with Parliament to correct these alterations and ensure that the budget serves the best interests of the country,” the Minister assured.

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