Regularising the activities of money lenders in Uganda

By Moses K. Alecho

Money lending by individuals as business could be tracing its origin from the advent of money itself.  Nevertheless, most countries in the contemporary world are said to have shelved this ancient method of money trade into the annals of their history in preference of modern functional commercial banks that now grace their midst.

Uganda as a state/nation in its uniqueness in the East African sub continent either consciously or unconsciously has continued unabatedly to see this ancient illicit trade grace its walls.  Money sharks in the names of money lenders have mushroomed in all corners of this great republic with no known laws/policies to guide their emergence existence and operations. If at all those laws are there then they have resolved to act in their disregard.

This status quo has been graced by dead silence by those at the establishment of the system of the day and other relevant institutions.  Silence and absence of laws/policies to regulate their operations have given them lee ways.  They have in essence responded to these anomalies by putting in place intriguing offers to their prospective clients. An   interest rate of 3.5% and 30% are charged daily or monthly respectively.  Borrowers who deposit land titles and log books for vehicles are in most cases asked to sign transfer forms and hand them over to the money lenders before money is finally released to them.

Conscious upright citizens of Uganda in their wisdom and intellect have hitherto remained wondering as to whether “to whom it may concern” stance those at the establishment of the system of the day have extend in the said respect, is not a tool in the interest of some big wigs in the government who could be using some of the money lenders as proxies.  There is also that school of thought expressing fears that Uganda could in the near future drift to a man eat man society if things are left as they are.

People go in for loans with good intentions I trust.  It is in rare cases that money is borrowed to service pleasurable activities.  Some people seek for some financing for purposes of funding/expanding their ongoing businesses or to establish new ones.  It is in some isolated cases that a number of Ugandan of late have gone in for short term loans to pay school/university tuition fees for their offspring or relatives.  In a nutshell, all these are borrowers who deserve protection from the government of the day and other relevant institutions.

Known history precisely detail money lenders as sharks with lives blended with wit and cunningness among other attributes.  It is therefore hoped that equating those found within the sovereignty of this great republic with the foregone description leaves nobody taken out of his/her comfort.

Holding security in money lending business is a pre requisite and quite ideal.  Compelling borrowers to sign transfer forms in their respect and have them put under their custody is little above the top.  Some money lenders in execution of their financial process resort to being elusive when loan maturity dates have come and borrowers are set to make their accounts good with them.  This comes about because a number of them get caught up in new waves of desires more so when the properties staked are striking and they have won their minds/hearts.  Desire to have them for keep, becomes their ultimate intention.  All these are ills that could be trimmed if there were clear cut regulating laws or policies in place and pronounced.

Bureaucracy and rigid lending policies that commercial banks in this country extend to Ugandans leaves them at the mercy of individual money lenders. Pressing calls for some finances have forced a number of Ugandans to act without a scrap of their conscience and in disregard of their instincts when they go to money lenders to borrow money. They get to realize that they have ventured into the unknown when things fail to go their way. Borrowing can at times be undertaken on anticipation of the near future financial rewards which in most cases fail to come true.  Many Ugandan borrowers have had themselves brought to the edge of sanity and forced to drop off the surface of the earth.  This come about when assets they have staked as security with the money lenders are put to disposal through auction.  Some of the assets borrowers put forward as collaterals to money lenders are acquired through their lifelong savings and they are supposed to hold on to them until they depart from this planet.  Denying them the right of ownership simply, leaves them totally incomplete.  Some families have ended up in shambles after having their dear properties taken away.

Stability of countries starts from families.  Instability in families can have multiplier effects, volatility which too often translates into unreasonable violence is normally the aftermath. Ugandans in their respective capacities desire not be witnesses/parties to this perceived odd moments I believe.

Those at the establishment of the system of the day are called upon to learn that the secret is always to find a point on which all feel the same and build on it.  It is imperative therefore for them and other relevant authorities to come up with laws or policies that could hitherto be lacking that seek streamline the existence and operations of all money lenders in Uganda.  Ugandans generally deserve protection at all times from the government of the day more so when unpleasant things that seek to impede on their rights and interests raise their heads.

Bank of Uganda as the sole regulator of financial institutions in Uganda is hereby requested to put in place pragmatic requisite measures to ensure that all money lenders both existing and those desiring to come up to the ambits of the laws of this country by having them officially registered and monitored.  This will make them learn to afford the luxury of reasonableness when dealing with their clients.

Likewise Uganda Revenue Authority as sole revenue collector in Uganda is hereby called upon to undertake some serious study to ascertain whether some taxable incomes do accrue in the course of money lenders businesses and seeks way forward.