Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has ordered the arrest of directors and the Accounting Officer of the Microfinance Support Centre (MSC) after the institution’s top leadership failed to appear before lawmakers for a second time to answer questions over billions of shillings in financial losses and unrecovered loans.
The decision marks an escalation in Parliament’s standoff with the government owned microfinance institution, whose officials are being questioned over a series of findings contained in reports of the Auditor General.
Among the issues before COSASE is a Shs67 billion loss recorded under Phase II of the Microfinance Support Centre’s operations, alongside Shs63.57 billion in loans that were written off but remain unrecovered.
Auditors also raised concern over another Shs6.5 billion in loans that were secured by expired guarantees, with some of the securities having expired as far back as nine years ago.
The committee wants the MSC leadership to explain how the losses occurred, why loans were written off without recovery and how the institution continued to rely on security guarantees that were no longer valid.
The failure of the directors and Accounting Officer to appear before COSASE despite being summoned for a second time angered members of the committee, who said the conduct amounted to disregard for Parliament.
The officials had been invited to appear before the committee after MSC was formally served with the summons on August 20, 2026. The invitations were reportedly delivered and acknowledged, while the Ministry of Finance, Planning and Economic Development was also notified.
COSASE consequently invoked its special powers under the Rules of Procedure of Parliament to compel their attendance.
Moving the motion, a committee member said the Accounting Officer had repeatedly ignored invitations issued by the committee and that Parliament could no longer rely on ordinary summons to secure his appearance.
“The Accounting Officer has demonstrated a continuous attempt to disregard invitations by this Committee. Having given them a second invitation, I want to move under Rule 208 and 218 of our Rules of Procedure on special powers of Committees,” the member said.
The lawmaker said the rules give parliamentary committees powers similar to those of the High Court in certain accountability proceedings, including the authority to order the arrest and production of persons whose attendance is required.
“I want to move that we issue arrest warrants for the Directors of the Microfinance Support Centre Limited,” the member said.
The committee subsequently directed the Clerk of Parliament and the Police to pursue the warrants and ensure that the MSC officials are brought before the committee to respond to the outstanding queries.
COSASE members said the Microfinance Support Centre could not operate outside parliamentary oversight simply because it is a corporate entity, arguing that its directors and Accounting Officer remain accountable for the institution’s operations.
Committee leaders also questioned attempts by the MSC leadership to create what they described as administrative confusion over responsibility for appearing before Parliament.
“There is an attempt to hide, because this entity as a corporate entity has Directors and they are conflating themselves with the Accounting Officer as well,” the committee leadership said.
The lawmakers insisted that the directors could not separate themselves from the decisions and conduct of the institution’s management.
The committee further referred to guidance previously issued by the late Speaker Jacob Oulanyah, who warned accounting officers against ignoring invitations from parliamentary committees.
According to the committee, parliamentary summons are not optional and officials who deliberately refuse to honour them can be subjected to proceedings for contempt of Parliament.
“The Accounting Officer selected to disobey and disregard the invitation of the Public Accounts Committee, COSASE,” the committee leadership stated.
“Mindful that the Speaker of the 12th Parliament, the Right Honourable Jacob Oulanyah, guided and mandated Committees to transact in accordance with the law and the Rules, and reminded Accounting Officers not to attempt to abscond from invitations,” the statement added.
The committee said the continued absence of the MSC leadership therefore placed the officials within the category of persons who can be compelled to appear before Parliament.
The financial questions facing MSC extend beyond the failure to recover loans.
Lawmakers are also seeking clarification on the governance of the institution, including the appointment of its Executive Director, John Peter Mujuni, and the circumstances under which billions of shillings in loans were authorised for write off.
The committee wants the officials to explain who approved the write offs, what recovery efforts had been undertaken before the loans were written off and why substantial amounts remained outstanding.
The Shs6.5 billion in loans backed by expired security guarantees has also raised questions about the institution’s credit management and monitoring systems.
Some of the guarantees, according to the audit findings being examined by the committee, had expired several years before the loans came under scrutiny.
Lawmakers said the situation raises broader questions about how MSC safeguards public funds while extending credit to beneficiaries.
The committee also rejected suggestions that the officials could seek intervention from senior government officials to shield them from parliamentary scrutiny.
One MP warned that attempts to use political connections to prevent the officials from appearing would not be accepted.
“We understand these agencies may try to call the Speaker or Deputy Speaker, whoever is available in this country, seeking protection. Please inform them we are saying no,” the legislator said.
The MP insisted that COSASE had a constitutional and legal mandate to examine the financial affairs of government entities.
“Our Committee has the power to transact on matters of accountability. The Microfinance Support Centre must appear before COSASE. It is a covenant, it is an enterprise. The shield it got from the previous leadership cannot be upheld,” the legislator said.
Other committee members called for the same enforcement approach to be applied to MSC as has been used against other government institutions that have failed to cooperate with parliamentary investigations.
One legislator urged the committee to move swiftly with the warrants rather than allow the matter to drag on.
“We send them a summons this evening and tomorrow morning we forward the warrants of arrest. Use the rules that we used yesterday to get Uganda Airlines to respond,” the MP said.
“These are not exceptional. They must also be subjected to the same treatment. The accountability of Uganda is through us,” the lawmaker added.
The committee leadership also acknowledged that enforcing the summons could trigger resistance but told members to remain firm in exercising Parliament’s accountability mandate.
“We are up for a fight because as we reclaim this space of accountability, of course you will hear a lot of background noise,” lawmakers were told.
They were further urged to remain committed to their constitutional responsibilities despite possible pressure from individuals affected by the investigations.
“You must be solid because you were elected by your constituencies to uphold this Constitution. As we brace up for this fight, prepare for possible hard times,” the committee was told.
Beyond the arrest order, COSASE has widened its inquiry by summoning government ministers who represent the state’s interests in the Microfinance Support Centre.
The ministers expected before the committee include the Minister of Finance, Planning and Economic Development, the Minister for General Duties in the Office of the Prime Minister, and the Minister of State for Microfinance.
The ministers represent government as a shareholder in MSC and are expected to respond to questions concerning the institution’s financial performance, governance and oversight.
Their appearance is also expected to help the committee establish how the government exercised its shareholder responsibilities while the financial problems highlighted by the Auditor General were unfolding.
For COSASE, the immediate issue remains securing the attendance of the MSC leadership.
The committee has now moved beyond ordinary invitations and resolved to use its enforcement powers to compel the directors and Accounting Officer to appear and account for the institution’s management at a time when Parliament is demanding answers over more than Shs130 billion in losses, write offs and other financial concerns.
The arrest order does not, by itself, determine liability for the financial losses. The officials will appear before COSASE and provide explanations to the committee before lawmakers make their final recommendations on the audit findings and the management of the Microfinance Support Centre.
