Minister Kasolo halts online money lending businesses
Kasolo called on money lenders to operate within the law Stressing that, “I've urged a temporary halt on licenses for online lenders pending further scrutiny. Clarifying my earlier stance,”
The State Minister for Microfinance, Hon. Haruna Kyeyune Kasolo, has halted online money lenders during a Tuesday dialogue organized by the Uganda Microfinance Regulatory Authority (UMRA) at Hotel Africana in Kampala.
Kasolo called on money lenders to operate within the law Stressing that, “I’ve urged a temporary halt on licenses for online lenders pending further scrutiny. Clarifying my earlier stance,”
The minister further lifted the ban on Uganda Microfinance Regulatory Authority (UMRA), emphasizing the importance of safeguarding both lenders and clients.
In December 2023, Hon. Kasolo temporarily halted the issuance of licenses to money lenders due to concerns over unfair policies.
He encouraged UMRA to inform the public about legitimate lenders, promising to explore government assistance, with a condition of providing affordable capital at 24% interest.
The Minister cited the influx of unregulated online lenders, raising concerns about their lack of established operating practices. He further warned that, “all unlicensed money lenders operating in Uganda will be publicly exposed through media channels to protect the general public,”
As the chief guest, Mr. Kasolo also commended UMRA’s Executive Director, Mrs. Edith Namugga Tusuubira and her team for their regulatory and supervisory efforts in achieving strong performance from Ugandan money lenders.
Additionally, the Minister pledged to discuss with President Museveni potential funding options to “grease” the operations of lending companies. He stated, “I can talk to the government to fund money lenders only on condition that they will avail 24% interest to clients per year so that the people can get cheap capital and do business.”
It should be noted that in August last year, government set new rules for online money lending. Part of these guidelines was a phrase where, “no digital or online money lender will be allowed to charge a defaulting customer a penalty fee exceeding 50 percent of the total amount they lent them,”
The rules were developed after a collective effort involving the regulator, the Ministry of Finance, and Bank of Uganda.
They will cover licensing, governance, credit information, place of business, digital credit, consumer protection, an anti-money laundering mechanism, and reporting of requirements.
