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MPs pin Bank of Uganda officials for lack of regulations on Mobile money loans
Unlike neighbouring countries like Kenya, the Central Bank in Uganda has no legal regime to regulate e-money.

Two telecom giants Airtel and MTN Uganda launched credit service platforms which allow customers to borrow money from mobile money an equivalent of taking a loan from a money lender or a commercial Bank.

 

This move which Members of Parliament say is unregulated also levies an interest rate from 2% - 5% depending on the amount of money borrowed.

 

Unlike the Banks, however, this money lending involving Telecom Companies is not directly regulated by Bank of Uganda a move MPs on the ICT Committee say is irresponsible of the Central Bank

 

Section 11(b) of the Financial institution Act gives Bank of Uganda mandate to licence financial institutions and approve products and services offered by these licensed financial institutions.

 

However, While appearing before the committee of ICT, Justin  Bagyenda the Director Supervision in Bank of Uganda was tasked to explain why Bank of Uganda had relegated its duties and failing to protect mobile money customers.

 

Also of interest to the committee was why Bank of Uganda was not regulating Mobile money service a platform that sees large chunks of money exchanging hands

 

Unlike neighbouring countries like Kenya, the Central Bank in Uganda has no legal regime to regulate e-money even when over 18 million people use mobile phones in the country.Our effort to seek clarification from Bagyenda was turned down.