Ugandans have for so long been crying and suffering at the hands of rogue money lenders who give them credit at very high interest rates and end up confiscating their belongings. Most of these are not regulated and go scot free even when reports are filed at police.
Now in a decisive move to protect borrowers and regulate the lending business in Uganda, Minister of Finance Planning and Economic Development Matia Kasaija has issued a Legal Notice No.21 of 2024 that will regulate Tier 4 Microfinance institutions and the rogue money lenders.
Under the new directive which is drawn in reference to the Tier 4 Microfinance Institutions and Money Lenders Act, Cap.61, the maximum interest rate that money lenders can charge is now set at 2.8% per month or 33.6% per annum.
The notice by Minister Kasaija comes at a time when Money lenders and Credit institutions are mushrooming in the country with others confiscating people’s belongings including National IDs as collateral for the money they give to Ugandans.
“In accordance with section 89 (1) of the Tier 4 Microfinance Institutions and Money Lenders Act, the maximum rate that a money lender shall charge on the principal or the actual sum of the money advanced as a loan to a borrower, is two point eight percent (2.8%) per month or thirty three point six percent (33.6%) per annum”-the notice reads in part.
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Good environment