KAMPALA. The Uganda Micro Finance Regulatory Authority has started licensing all money lenders in the country.
The licensing, whose regulations were gazetted on March 16, 2018 under the Micro-finance Institutions and Money Lenders regulations was launched this week.
The Communications Manager UMRA, Mr Edward Bindhe, says the Authority will move along with overseeing works done by the money lenders, Saccos and all Micro-finance support institutions in the country.
“We therefore, invite money lenders to start picking forms for licensing,” he says.
In May 2016, the Tier IV Micro-finance Institutions and Money lenders Act was passed by the Parliament to effectively govern the spectrum of Tier IV financial institutions and Money Lenders with the objective of protecting the savings the depositors, limiting predatory lending and unethical practices and building confidence in the system to promote financial inclusion.
UMRA was later established to among others, License, regulate and supervise the work done by money lenders and Micro-finance institutions in the country.
It is upon this background that the Authority is inviting Money Lenders with requirements such as; a certificate of incorporation to start picking applications for licenses.
Mr Bindhe indicated that the move would help streamline a business that has for long been chartered with several inefficiencies.
“Regulations for Non-Deposit Taking Micro-finance institutions have also been gazetted and we await the registration of such non-deposit entities for licensing,” Mr Bindhe explained.
Examples of Non-Deposit taking micro-finance institutions in the country include; Letshego, Platinum Credit, Premier Credit, Uganda Micro Credit among others.
He said the licensing would cost up to Shs500,000 which would cater for the awarding of the annual license.
On several occasions, several micro finance institutions in the country have been paying for licenses through courts of judicature. However, the move to license the institutions, according to Cyprian Kavuma, the Commercial officer in Kalangala District would help guard people against theft and exorbitant costs money lender levy on people who borrow from their institutions.