Edith Tusubira ED UMRA/URN photo
The Finance Committee of Parliament has tasked Uganda Microfinance Regulatory Authority-UMRA to crackdown on unscrupulous money lenders illegally operating in the country. This came up when the UMRA boss, Edith Tusubira appeared before the committee on Wednesday alongside the Microfinance State Minister, Haruna Kasolo to present their budget performance for the 2019/2020 and current financial year.
The MPs tasked Tusubira to explain what she is doing to reign in on the swarming number of unregistered money lenders operating in the country. They accused the money lenders of charging exorbitant interest rates and annexing the property of their victims. The authority is mandated to regulate, license and supervise tier 4 non depositing taking microfinance institutions and money lenders.
Kumi County MP, Charles Ilukor quizzed Tusubira on whether the authority was aware of all the money lenders operating in the country. He observed that many lenders are operating illegally and fleecing desperate Ugandans.
The Nakaseke North MP, Syda Bbumba decried the high charges levied on borrowers by microfinance institutions noting that this was constraining them from seeking loans.
Tusubira admitted that the authority has not started regulating interest rates and was seeking to first popularize the law on tier 4 institutions.
Tusubira however noted that the authority was meant to print a list of all licensed money lenders in the gazette but was constrained by the lack of funds. Despite raising this issue, MPs were also concerned about whether the authority was in a position to adequately execute its mandate.
Ilukor also noted that UMRA was very thin on the ground and was poorly resourced yet the government had already pumped over Shs100bn into the emyooga programme. He expressed worry that the SACCOs that are receiving these funds are not being regulated properly.
Tusubira noted that the authority was constrained by funds and disclosed that unfunded activities require Shs15.2bn, which will help them to put in place several interventions. UMRA is currently operating on a Shs4bn budget.
The authority requires Shs2.9bn to meet employee costs, Shs8.5bn for Machinery and Vehicles and Shs1bn for travel and transport among other unfunded priorities.