Money lenders are now obliged to be registered.
Since March 2018 over 41 money lenders have been licensed by Uganda Micro Finance Regulatory Authority (UMRA) following its mandate as stipulated in the Tier 4 of the Micro-finance Institutions and Money lenders Act which calls for regulation of the works of money lenders and micro finance institutions.
Many Ugandan have ended up homeless after losing all their properties to money lenders who compelled them to sign transfer forms instead of loan forms.
According to Elly Biliku, the executive director of (UMRA), the establishment of the Uganda Micro Finance Regulatory Authority was with objective of protecting the savings the depositors, limiting predatory lending and unethical practices and building confidence in the system to promote financial inclusion.
“We understand that it’s easier to acquire credit from money lenders but usually the lenders want to acquire the borrower’s assets in form of collateral one is presenting and many just append their signatures even before understanding the documents presented to them “ Biliku noted.
UMRA was established to among others, license, regulate and supervise the work done by money lenders and Micro-finance institutions in the country.
It is upon this background that the Authority is inviting money lenders with requirements such as; a certificate of incorporation to start picking applications for licenses.
“Since then only 41 moneylenders have been licensed having fulfilled all the requirements as by the authority “says Avu Elly Biliku executive director, UMRA
Among the requirements is having registered as a company, having company directors, a certificate of good conduct issued by Interpol and having a visible office. Elly Biliku adds that licensing cost Shs500, 000 which would cater for the awarding of the annual license.
“On top of supervising their operations, those who have been running brief case businesses shall be automatically eliminated from business if they don’t meet the requirements. Avu Elly Biliku executive director, UMRA
Initially micro finance institutions in the country have been paying for licenses through courts of judicature who haven’t being monitoring their works hence exorbitantly lending money to Ugandan and end up taking their property.