President Yoweri Museveni has fired a warning shot at moneylenders who’ve been bleeding borrowers dry with eye-watering interest rates.
While addressing the National Resistance Movement (NRM) caucus on Thursday, President Museveni slammed the heartless money lenders charging jaw-dropping interest rates of up to 20% per month. He demanded to know who had allowed these loan sharks to operate with such impunity.
He said these big interest rates have pushed many young borrowers to the brink of despair. Some have even resorted to taking their own lives.
“These moneylenders who are causing suicide to our young people, who allows them to operate? Why should someone charge 20% interest on a loan per month? This must stop.” he said
The President pointed squarely at the Ministry of Finance, instructing them to enforce a statutory instrument under section 90 of Tier 4 Microfinance Institutions and Money Lenders Act 2016, in just two weeks, that will put the squeeze on those money lenders and give borrowers the financial breathing space they’ve been praying for.
This means that a statutory instrument is to be drafted and enforced to regulate and rein in these loan sharks.
The Attorney General, Kiryowa Kiwanuka, clarified that money lenders operate under the law and are licensed by microfinance institutions overseen by the Ministry of Finance.
However, it was noted that the Ministry had not established provisions for maximum interest rates since the enactment of the Tier 4 Microfinance Institutions and Money Lenders Act in 2016.