BoU directs on shady money lending apps

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BoU directs on shady money lending apps
The central bank in Kampala

The increased number of unlicensed digital lending apps also known as spy loan apps has raised concern from the Central bank with multiple vulnerable Ugandans falling victim as data  is being sold in the dark webs to hackers.

In a May, 29 letter, the Central Bank painted a picture of unlicensed multiple payment service providers and payment system operators dominating digital payment systems with numerous outcry from individuals falling prey for these spy loans with unethical collection practices, high interest rates and harassment of borrowers.

In the letter, the director National Payment Systems at Bank of Uganda Mackay Aomu noted that section 6 of the anti-money laundering act 2013 as amended and the regulation 18 of the anti-money laundering regulation 2015 require an accountable person to undertake customer due diligence measures  before establishing any business relationship.

Furthermore Bank of Uganda directed the digital lenders to carry out due diligence through holding valid licenses and obtain confirmations from Uganda Microfinance Regulatory Authority.

Cyber Security expert Jerome Okot explains how digital money lenders beat security to access and capture sensitive financial information from vulnerable Ugandans.

Okot says users should refrain from opening malicious apps and stressed the need to reduce the use of unregulated apps accompanied with provision of multiple access to your financial information.

“Not every money lending app that you come across is regulated, make due diligence before you give in your personal information and access a genuine credit” Okot said

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