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Central bank warns MFIs on deposit-taking

By Vision Reporter

Added 24th July 2005 03:00 AM

BANK of Uganda (BOU) has warned unlicensed Micro Finance Institutions (MFIs) against taking deposits, saying action would be taken against those who do not comply with the law, top officials have said.

BANK of Uganda (BOU) has warned unlicensed Micro Finance Institutions (MFIs) against taking deposits, saying action would be taken against those who do not comply with the law, top officials have said.

By Sylvia Juuko

BANK of Uganda (BOU) has warned unlicensed Micro Finance Institutions (MFIs) against taking deposits, saying action would be taken against those who do not comply with the law, top officials have said.

Agnes Kamya, the deputy director of Non-Banking Financial Institutions Department, said a survey will be carried out to ascertain MFIs that are not complying with the law.
“There are about 1,500 MFIs all over the country.

“BOU will undertake a countrywide survey and appropriate action will be taken against those found still taking deposits,” she said.

Kamya was addressing journalists during a monthly press briefing at BOU offices on Friday.

She said unlicensed MFIs can continue operating but should have ceased accepting deposits from the public by July 1.

They should have also stopped intermediating compulsory savings or loan insurance funds.

Kamya said the central bank had licensed only three Micro Finance Deposit-Taking-Institutions (MDIs), which include Pride Microfinance, Finca and Uganda Microfinance, while it is processing a licence for Uganda Finance Trust.

David Kalyango, the assistant director of accounts, said not all MFIs are licensed by the central bank.

“Not all MFIs are licensed by BOU but only those taking deposits from the public.

“The categories of licensees permitted include the 15 commercial banks, seven credit institutions and the three MDIs,” Kalyango said.

He said categories like circles are regulated under the trade ministry.
Kalyango said they should not accept money from the public but particular group members.

The central bank has been encouraging all MFIs to apply for MDIs licences.
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Central bank warns MFIs on deposit-taking

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