Loan Apps are swallowing Ugandans, plz Ug!

By Drone Team 

The loan Apps are as connvincing as a Biblical prostitute woman, whose lips Bible says drip honey yet in the end take man to Sheol.

Loan Apps! Are they legally established? The Drone Media thinks not. These Loan Apps are a menace, they are a thorn in the foot. They are many, but they all belong to one business person. Close sources told The Drone Media that Loan Apps use money on suspense accouts. This money is poured into circulation in form of quick loans, thereafter the beneficiaries swim in free exorbitant interests.

Sadly, Loan Apps are swallowing Ugandans. For example, a loan of sh250,000 is dispatched to a disperate Ugandan, who is required to pay sh376,000 in seven (7) days. What percentabge is that? This is broadday robbery. Surprisingly, these Loan Apps claim they are regulated by Microfinance.  Despite their claimance, they abuse the existing laws governing loans.

Can you imagine, a loan of 7 days they begin harassing you on the fifth day? On top of harassment, they will always frequent you messages, this kind of blackmail Olemwa!!   Next time you borrow from loan apps read this:

What are the Regulatory Do’s and Don’ts for Moneylending?

The Tier 4 Microfinance Institutions and Money Lenders Act 2016 was rightly enacted to provide in part for the management and Control of Money Lending Businesses. The Act repealed the Money Lenders Act Cap 273, which required moneylenders to apply for a Money Lending License from the Chief Magistrate’s court.

The Act created the Uganda Microfinance Regulatory Authority (UMRA) under section 6 as a body corporate with perpetual succession and a common seal with functions among others to regulate, License and supervise the money lending business in Uganda.

The Regulatory Do’s for Moneylending;

1. An individual or Company incorporated in Uganda and carrying out money lending business can apply for a license.
2. The entity seeking a money lending license from the Authority must be a legal entity with an established office.
3. A licensee shall display the license at all the premises where money lending is transacted.
4. A license shall expire on the 31^st of December in every year and may be renewed annually upon application to the authority.
5. Furnish the borrower with a copy of the loan agreement including all fees.
6. Display interest charges at all times at the premises where money lending business is conducted.
7. Keep and maintain records including proper books of accounts, a cash book, ledger, register of securities register of debtors in a form that the Authority may require.

The Regulatory Don’ts for Moneylending;

1. A company shall not operate a money lending business without a license.
2. A money lender shall not take National ID, passport, warrant card, or other documents establishing the identity or nationality of the holder, bank savings, ATM cards and security codes for the ATM cards as collateral for money borrowed.
3. Charging exorbitant and compound interest rates on loans.
4. Borrowers should not sign sale’s agreements for accessing credit facilities instead of loans agreements.
5. Borrowers should not sign transfer documents in favour of the lender as part of the security for accessing credit.
6. A money lender is not authorized to carry on business under more than one name.
7. A money lender shall not take client deposits.
8. A license issued is not transferable or assignable.