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NIRA warns money lenders against using National IDs as loan security

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The National Identification and Registration Authority (NIRA) has cautioned Ugandans and dealers in the money lending business to stop using National Identity Cards as security for obtaining loans emphasizing that these cards are a government property

 “NIRA would like to draw your attention to Section 69 of the Registration of Persons Act, 2015 which clearly states that an issued National Identification Card remains the property of the Government of Uganda.” reads legal Alert notice no.1 of 2023 from NIRA

Therefore, NIRA warned money lenders who have been retaining National Identification Cards as security for loans issued out to individuals to stop the practice because it violates the rights of the cardholders.

“Money lenders who have been retaining National Identification Cards as security for loans issued out to individuals are also advised to stop such illegal practices that violate the rights of the cardholders,” NIRA stated.

NIRA added in a statement, “The public is encouraged to report to any nearest NIRA Office, any person who has retained their national identification card as security/collateral. National identification cards are vital government-issued documents that serve as proof of identity and citizenship.”

Most money lenders in the country require individuals seeking to acquire loans to present and deposit original copies of their National Identity Cards which they pick up on paying back the loan.

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