If you have huge cash on your Mobile Money (MM) Account, you risk losing it in case the telecom operator collapses.
This is revelation was made by Justine Bagyenda, the Executive Director- Supervision at Bank of Uganda (BoU) while appearing before the Parliamentary Committee Of Communications and Technology on Thursday.
MPs were shocked to learn that there’s no proper regulation of Mobile Money Business in Uganda.
While some MPs thought it was BoU’s role to regulate MM, Bagyenda denied it, asking lawmakers to quickly come up with a law that will govern all Mobile Money businesses.
The MPs discovered that those holding big amounts of money on their MM accounts are largely at a high risk of losing it all in case the business of the telecom company has collapsed.
“There is no mobile Money insurance and in case maybe a telecom company winds up and a person is supposed to get his money. In case of MM, they can’t get it because how do you claim for that money? And to which bank or to whom do you go to claim for your money?” Tororo North woman MP, Annet Nyakecho, the Committee Chairperson said.
“So these are the most of the big questions we are looking at and maybe if they come up with a new law it will answer most of these questions, but as it stands now it’s just open you bank with MM, you lose your money on closure.”
Because they setup guidelines for all money in the entire country, MPs were interested in getting answers from the BOU officials about mobile money operations. However MPs were left unsatisfied with the official’s answers.
Nyakecho said that on many occasions the BoU officials were trying to bit around the bush for instance on how the issue of telecom companies lend out money came into mobile money and yet the population is not aware that the money they get for example from WEWOLE (Airtel Uganda lending slogan) is not actually from Airtel as company, but from business people.
“so we were tasking these people to tell us why these people charge exorbitant interest rates and they are making a lot of profits, but BoU has denied that they don’t regulate money lending.” Nyakekyo said of their meeting with BoU officials.
Mobile Money business has been on the Ugandan market for nine years without proper legislation.
However, Bagyenda later told MPs that if a person holding huge sums of money on his MM account is insured, it’s very simple Bank of Uganda can pay them Shs3m only.
“In case you are under insurance, Bank of Uganda can pay you for the loss and it’s Shs3m,” Bagyenda said.
Henry Kabafunzaki, the former State Minister for Labour wondered how someone with Shs3m on his MM account can be paid Shs3m only if a telecom company collapses. He wondered what happens to the balance of the money a client had on his account.
Bagyenda’s response left MPs in shock when she said that it’s a “Loss” to the client.