Money lending in Uganda is pure usury - period!
Publish Date: Feb 11, 2014
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By Fr Fred Jenga

I read with interest a New Vision article that Members of Parliament are considering revoking the Money Lenders’ Act of 1952. I looked at the online version of the Act and there were several things I noticed I had never heard about.

For instance do you know it is illegal for money lenders to advertise their ‘quick loans’ as we see them do all over Kampala and in other major towns of Uganda?

You probably know of someone or have heard of horrific stories of people who have fallen in the hands of rich money lenders or loan sharks, and in an instant lost everything valuable they had because of unfair interest terms they agreed to in a moment of financial crisis.

The money lending business has spiraled out of hand in Uganda and it is long overdue that parliament reviewed the 1952 Act and updated it to attend to the current unfortunate situation.

Our criminal justice system partly has been complicit in providing an enabling environment and the needed connections for the survival of this unfair arrangement. I have never been a victim of this system but have sat in counseling sessions with people who were going through tough times because of a money lending arrangement gone terribly badly.

The word usury is one that is rarely used in everyday speak, but it is one that Pope Francis has picked up recently and is reintroducing into our everyday vocabulary especially in financial transactions.

Usury simply means the practice of making unethical monetary loans with excessive interest rates.

It is a form of taking advantage of the misfortunes of others to enrich one self. Most major world religions condemn this exploitative practice but few voices in recent years have come out to strongly highlight this sad practice that has caused untold suffering to thousands of individuals and families through loss of hard earned property, service of jail terms or both.

The Qur’an teaches that; “Those who charge usury are in the same position as those controlled by the devil’s influence.

This is because they claim that usury is the same as commerce. However, God permits commerce and prohibits usury.

Thus, whoever heeds this commandment from his Lord, and refrains from usury, he may keep his past earnings, and his judgment rests with God.

As for those who persist in usury, they incur Hell, wherein they abide forever” (Al- Baqarah 2:275).    The Qur’an further adds that; “The usury that is practiced to increase some people’s wealth does not gain anything at God.

But if people give to charity, seeking God’s pleasure, these are the ones who receive their reward many fold” (Ar-Rum 30:39). Islamic banking that Old Kampala has been pressing the Government about is informed by this theological thinking.

The Bible is clear about exploitation of the disadvantaged and offers good counsel on lending. In Mathew 5:42 Jesus said; “Give to the one who asks you, and do not turn away from the one who wants to borrow from you.”  

He further added in Luke 6:34 that; “And if you lend to those from whom you expect to get repayment, what credit is that to you?” Does this mean then that lending with interest is unethical in Christianity?

Absolutely not; it is the exorbitant interest rates imposed upon people in difficulty that is immoral.  Charity or love needs to inform decisions money lenders make about interest rates.  

Over to the honorable members of parliament as they review or revoke the Money Lenders Act of 1952. In my opinion however, we would do better with a completely new Act.

University of Portland -USA

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