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In a statement on Thursday, the Uganda Microfinance Regulatory Authority (UMRA), which has the mandate to license, regulate, and supervise Tier 4 Microfinance Institutions and Money Lenders in Uganda, expressed concern over a number of entities that are engaged in the provision of online credit and loans through several applications to the public in contravention of the Tier 4 Microfinance Institutions and Money Lenders Act, 2016 and the Tier 4 Microfinance and Digital Lending Guidelines 2024.
“Some of the apps include: Flypesa, banana app, Loango, Nile, gloan app, Boom loan, Mpacash, Cashpulse, Credit Lab, Flowerloan, Wind-money, Lever credit, Cashmate, Ezee loan, Kasente, Sunlit, Wind money, Cashflow, Moji, Ozzy money, Mumu money, Kasquick, More Pesa, Muno, My loan, Real Cash, Star Loan, Get Cash,” said UMRA.
These unauthorized entities mostly employ the use of mobile applications and social media platforms to lure the public into borrowing from them.
“The activities of these unauthorized entities further amount to non-adherence with the Consumer Protection requirements of UMRA and are an abuse of consumer data privacy. They also violate the recently issued Tier 4 Microfinance Institutions and Money Lenders Digital Lending Guidelines 2024. The purpose of this public notice is therefore to caution the general public to desist from transacting with unauthorized loan providers.”
Uganda has experienced a significant rise in online lending platforms, commonly referred to as quick loan apps. These platforms have significantly altered the financial landscape and the way citizens obtain credit. With just a smartphone and internet access, individuals can now secure loans within minutes, a stark contrast to the traditionally lengthy procedures of conventional banks.
This convenience has become crucial for many Ugandans, particularly small business owners and low-income earners who previously struggled to access formal credit services.
However, this ease of access comes at a high cost. Many of these online lending platforms operate outside the regulatory framework. Unlike traditional banks and microfinance institutions, these digital platforms are not subject to financial regulations designed to protect consumers, leading to an environment where predatory lending practices have flourished.
