Illegal Moneylending Firms Named by Government

(Kampala) – The Government has identified a series of illegal moneylending firms operating in the country, aiming to protect citizens from exploitation and financial harm. The Uganda Microfinance Regulatory Authority (UMRA) released a detailed list of these unauthorized lenders on Monday, August 26, 2024. The identified firms are reportedly operating through illegal online applications, which lure unsuspecting borrowers with quick loans and then trap them with exorbitant interest rates and harsh debt-collection methods.

UMRA highlighted that these firms primarily use mobile apps and social media platforms to attract borrowers. Once individuals borrow money, they often find themselves facing steep interest rates. If they struggle to repay, they are subjected to aggressive and unethical debt collection tactics. These methods include public shaming on social media, intimidation, and threats, which have led to severe consequences for many Ugandans. Some borrowers have experienced depression, loss of respect among their peers, and even job loss as a result of these practices.

The list published by UMRA in the New Vision newspaper serves as a public caution, urging citizens to avoid engaging with these unauthorized loan providers. UMRA emphasized the importance of only dealing with authorized lenders who adhere to the Tier 4 Microfinance Institutions and Money Lenders Digital Lending Guidelines. The public has also been encouraged to report any suspicious or illegal moneylending activities to UMRA through their toll-free lines, email, or by visiting their offices in person.

This action comes in response to growing public concern and outcry over the practices of online lenders. The list of illegal moneylenders provided by UMRA is extensive and includes a wide range of entities operating under various names.

Illegal Moneylending Firms Identified by UMRA:

These firms have been red flagged by the government for violating the regulations that govern microfinance and moneylending in the country. The public notice issued by UMRA is a clear message to the public to be cautious and avoid these entities, which operate outside the law and can cause significant financial and personal harm.

To combat the rising issues associated with these illegal lenders, UMRA has provided various channels for the public to report suspicious activities. The authority remains committed to ensuring that the financial sector operates within the legal framework and that citizens are protected from exploitation.

The release of this list is a significant step in addressing the concerns of the public and curbing the activities of these unauthorized lenders.