The Minister of Internal Affairs, Maj. Gen. Kahinda Otafiire has said the government is going to intensify operations against moneylenders who require national identity cards as collateral for acquiring loans.
In a statement to parliament, Otafiire said the law already makes it illegal for lending institutions to require IDs for loans.“It should be noted that under Section 69 (3) of the Registration of Persons Act, an issued national identification card remains the property of the Government. A money lender therefore has no authority to deprive or dispossess a person of his or her national ID. The national ID card is Government property and cannot be staked as security or collateral. Government did not intend national identity cards to be used as collateral for borrowing but rather as identification documents to foster social and economic development in the country being enablers to access services easily by the citizenry,” Otafiire said.
The minister’s statement followed a concern raised by Osuru Moureen, the Woman Member of Parliament for Arua City who in August asked what the government’s plans were to end the vice of confiscating people’s national identity cards as security for loans by moneylenders.
In his statement, Otafiire said this practice not only infringes on the rights of the citizens but also poses a serious threat to national security and social stability.
“The National Identity Card is now a critical document that serves as proof of identity, nationality, and citizenship. It is essential for accessing a wide range of services… This illegal practice, leaves borrowers vulnerable and deprives them of their most basic identification document, thereby leading to further financial and social marginalization,” Otafiire said.
He added that when a national ID is confiscated, it severely limits an individual’s ability to participate in various livelihood activities such as opening a bank account, accessing government services, or verifying their identity in various circumstances.
“The confiscation of National Identity Cards by money lenders opens the door to exploitation and abuse,” Otafiire said. “Individuals who find themselves unable to repay their loans are often subjected to harassment, intimidation, and further financial extortion. This cycle of exploitation exacerbates poverty and undermines efforts to foster social and economic development in our communities.” Otafiire said.
As a measure to curb the vice, Otafiire revealed that NIRA is in the process of upgrading the national ID by rolling out Digital Identity Cards which shall take away the need to carry a physical card.
“With digital verification, citizens will be able to authenticate their identity using electronic means, such as mobile apps or online platforms. This planned shift reduces the risk of physical IDs being used as collateral since digital identity verification does not require the physical handover of the card. Money lenders will no longer be able to hold a physical national ID as security because the verification process will remain under the control of the cardholder and the authorized institutions,” Otafiire said.
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