The Uganda Microfinance Regulatory Authority (UMRA) is set to roll out an operation targeting organizations and individuals illegally involved in the money lending sector.
“It has come to the attention of the Authority that some unlicensed individuals are conducting money lending business in total disregard of the provisions of the law,” Peter Emong Ojulang, UMRA executive director, said in a Monday statement.
According to the executive director, Section 84 of the Tier 4 Microfinance Institutions and Money Lenders Act, 2016 prohibits anyone from conducting money lending business without a license.
However, the Authority has discovered that unlicensed money lenders are mushrooming around the country conducting business in defiance of the sections under the Tier 4 Microfinance Institutions and Money Lenders Act, 2016 and accompanying regulations.
The Act applies to money lenders, SACCOs, non-deposit-taking microfinance institutions and self-help groups.
UMRA, which was established in 2016, is mandated to regulate, license and supervise all the Tier IV microfinance institutions and money lenders in Uganda.
Ojulang advised Ugandans to only borrow money from licensed dealers.
“We encourage borrowers to transact business with only LICENSED money lenders to avoid being cheated,” he said.
“The illegal money lending companies are taking advantage of desperate people affected by Covid-19 pandemic to cheat them. We are informing the general public that the Authority has finalized plans to launch enforcement operations against all those operating outside the law.”