Some of the notorious money lenders include; iKash, Flypesa, banana app, Loango, Nile, gloan app, Boom loan, Mpacash, Cashpulse, Credit lab, Flowerloan, Wind-money, Lever credit, Cashmate, Ezee loan, Kasente, Sunlit, Wind money, Cashflow, Moji, Ozzy money, Mumu money, Kasquick, More Pesa, Muno, My loan, Real Cash, Star Loan, Get Cash, Quick Sente, Ok Loan and Fair Credit.
The Association of Money Lenders in Uganda (AMLU) has pledged to eliminate unlicensed money lenders, following President Yoweri Kaguta Museveni’s recent roar to punish them for charging high interest rates on Ugandans. This move aims to enhance the integrity of Uganda’s financial system.
AMLU brings together legitimate and ethical money lenders, providing essential financial services to sectors where traditional banking may be limited or inaccessible.
On Monday, Museveni announced plans to introduce a law aimed at regulating extortion by money lenders. Noting, “I want to bring a law to fight money lenders. Money lenders are becoming a problem, they go to our villagers and cheat them, charge them extortionately yet our inflation rate is very low at 3% or even lower but you find these people charging them 240%” he said.
According to the Uganda Microfinance Regulatory Authority (UMRA), by September 2023, 1,302 licensed money lenders had extended loans to approximately 2.5 million customers, with an outstanding portfolio of Shs1.2 trillion. This significant figure underscores the sector’s substantial contribution to economic activity.
Money lenders provide crucial capital for farmers to purchase seeds and fertilizers, shopkeepers to stock their shelves, and transport operators to maintain their vehicles. By offering financial services to those who might otherwise be excluded from the formal banking sector, AMLU members promote financial inclusion, driving economic growth and poverty reduction.
The association acknowledges public concerns about exploitative money lenders and is actively addressing these issues.
“We understand the concerns surrounding exploitative lending practices and are committed to eradicating them,” said Jonan Akandwanaho, AMLU Chair. Adding, “Our goal is to work closely with regulators and stakeholders to ensure our services continue to support economic growth while protecting borrowers’ interests.”
To address these concerns, AMLU proposes strengthening its working relationship with UMRA. This collaboration will identify non-compliant actors and reinforce the legitimacy of licensed money lenders.
Regular engagement sessions with UMRA will focus on enforcing minimum ethical standards. AMLU will also offer its platforms for skills development and awareness programs to promote good lending practices.
“The money lending sector has a critical role in providing financial access to millions of Ugandans,” said Ben Kavuya, founding Chairperson and Member of the Advisory Council. “We are dedicated to improving our practices, enforcing ethical standards, and ensuring our members operate responsibly.”
Through constructive dialogue and cooperation with regulatory bodies and the government, AMLU believes it can address concerns, improve industry standards, and continue to serve Ugandans responsibly, safeguarding the country’s financial future.
