Iganga-based microfinance closed over illegal operation
Officials from UMRA also arrested two staff of RICA whom they found in the office by the time of closure in Iganga town on February 20, 2025.
Detectives in plain clothes from Iganga Police Station doing a search at RICA Microfinance Ltd which was closed due to operating without a license. (Courtesy photos)
By Donald Kiirya
Journalists @New Vision
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The Uganda Microfinance Regulatory Authority (UMRA) has closed Iganga municipality-based RICA Microfinance Ltd after establishing that it was operating without a licence.
Officials from UMRA also arrested two staff of RICA whom they found in the office by the time of closure in Iganga town on February 20, 2025.
According to UMRA head of legal Sheila Birungi, with the help of detectives from Iganga Police Station, they arrested credit officer Paul Musasizi and Claire Muyama, a cashier, after finding out that they were operating a microfinance institution without a licence. By press time, they were still in custody at Iganga Police.
She said RICA Microfinance was founded by Cathy Mbabazi who is also on the run and wanted by the Police.
Birungi said as UMRA officials were conducting an anti-money laundering onsite inspection on some old institutions in Iganga municipality, they came across RICA Microfinance Ltd on the same building where one of the institutions they were inspecting was, along Aso Street.
Background
Birungi said in 2018, UMRA issued RICA a licence to operate as a non-deposit-taking microfinance institution and it was renewed in 2019.
She added that by virtue of that licence, RICA was only allowed to lend money to its clients but not to take savings from the public or take deposits from the public.
Some of the passbooks that Police recovered at RICA Microfinance Ltd in Iganga. 
“RICA lured the public using UMRA’s licence into saving or depositing their money with Cathy Mbabazi and savers or depositors were promised high interest on their savings—many people saved but at the time of maturity, there was no money to pay them,” Birungi said.
She added that in 2019 they received a flood of complaints from the public against a company called RICA Ltd and that they tried to handle complaints but at a later stage RICA closed the shop and one of the directors, Cathy Mbabazi disappeared.
Birungi said RICA had also applied for a licence in 2020 but UMRA refused to renew it and that during the complaint handling of the matter, they realised that the institution (RICA) was operating under three names which include; RICA Ltd, RICA Microfinance Ltd and RICA Financial Solutions and Business Consultancy Ltd; and their receipts plus other documents had one of the three names.
“So, when we came across RICA Financial Solutions and Business Consultancy Ltd, we were shocked. We got in touch with the Police and also exercised our powers under section (9) of the Tier 4 Microfinance Institutions and Money Lenders Act to raid the premises and confiscated their documents including loan files, computers and arrested two suspects,” Birungi said.
Birungi added that according to the Act, lending money without a licence is an offence.
She further said that they recovered passbooks that showed that people were saving and depositing money, a case she (Mbabazi) was doing in Kampala where she allegedly defrauded people.
Sh3b stolen in Kampala
One of UMRA’s staff, Eddie Bindhe, revealed to New Vision Online that an estimated shillings three billion was stolen from customers who unknowingly opened accounts with RICA Microfinance in Kampala in 2019 and the company disappeared.
Bindhe added that when RICA was closed in Kampala, it relocated to Iganga and Mbale where it opened up branches.
According to the officer in charge of criminal investigations at Iganga Police Station, Ritah Basemera, the two suspects were arrested on February 20, 2025, and are still under custody as Police continue with investigations into the matter. That their offices were closed too.
Basemera said the duo will be charged with operating a Microfinance Institution without a licence under file case number SD: 107/20/02/2025.
“The RICA branch in Iganga was operating normally without a licence and with directives of one Cathy Mbabazi but we are still investigating the matter,” Basemera told New Vision Online on the phone.