It's three years in jail for moneylenders who take national IDs

By law, the national ID is a property of the government and this is clearly indicated on the document.

NATIONAL | The government has upgraded its warnings to moneylenders who take national identification cards of borrowers as collateral to dire indictment - they face three years in jail.

The Minister for ICT and National Guidance, Dr Chris Baryomunsi, says the Attorney General has advised that it is unlawful and illegal to demand national IDS as collateral.

The law is not limited to moneylenders but anyone transacting in a business who does so will face the full force of the law.

"I want to clarify to the public particularly those who are in the business of moneylending that going forward, it is unlawful and illegal to demand from the borrower his or her National ID as collateral," Dr Baryomunsi said.

Over the years, many moneylenders in the country have taken to taking national ID as collateral. The identification document is particularly crucial in a country where a passport is not acceptable in any transaction other than travels.

Most borrowers whose IDs are withheld by moneylenders cannot engage in routine activities such as buying Simcards or processing bank documents.

But, by law, the national ID is a property of the government and this is clearly indicated on the document.

"A moneylender shall not demand or accept the following as collateral according to the law, a National Identity Card, a passport, a warrant card, or other documents establishing the nationality and identity of the holder," Baryomunsi said.

Previously, the government only warned moneylenders and threatened prosecution for offenders.

But now the attorney general, as the chief legal advisor to the government, has made it clear it is illegal.

Those found in the breach of this new guidance on the law are looking at three years in prison.