Microfinance Regulator Boss Warns Money Lenders Against Violating Client’s Privacy

The newly appointed Executive Director of Uganda Microfinance Regulatory Authority has warned money lenders against demanding for national identity cards, bank ATM and passport as security for loans.

Edith Namugga Tusuubira says demanding for such documents amounts to a violation of principles of consumer protection and infringes on the privacy of customers.

Her warning is based on the 2016 Tier 4 Microfinance Institution and Money Lenders Act which, prohibits the use of bank ATMs, warrant books, passports and national identity cards as collateral.

‘For instance, we are no longer accepting lending using security as someone’s national ID, which has been the practice. We no longer accept security in form of someone’s passport because it is intended for identification,’ Tusuubira said.

‘We, also, no longer allow organisations to take people’s ATM cards. Those are some of the practices that UMRA is trying to curb. We also believe that if you operated under UMRA standards, there will be improved trust between the two parties that are transacting under the Tier 4 law,” Tusuubire added.

Tusuubire revealed that the Authority plans to carry out nationwide sensitization programs to create public awareness of the regulatory requirements for money lending, starting this financial year.

The law safeguards people seeking financial services from money lenders. It spells out stringent measures for persons trading as money lenders, who are required to register as corporate entities before transacting business.

The Uganda Microfinance Regulator Authority is charged with licensing and supervising money lenders.

Edith Tusuubira ascent to the helm of the authority in May, 2019 after the Board approved her to replace Elly Avu Biliku, who was the acting Executive Director since 2017 when the authority was established.

In an interview with theCooperator, she promised to tighten her grip on all the Tier 4 Microfinance Institutions and money lenders. Tier 4 microfinance institutions include Saccos, non-deposit taking microfinance institutions, self-help groups and community based microfinance institutions.

‘Historically, we have had many people borrowing and lending money informally and, sometimes, at a point of disagreement; it is not very easy for you to tell who is doing the wrong and the right thing,” said Tusuubira.

As such, Ugandans are encouraged to embrace the Tier 4 Microfinance Institutions and Money Lenders Act by obtaining licenses from UMRA that will allow them carry out business legally.

‘I picture a well-regulated microfinance sector with information that is reliable and dependable, a fully regulated financial system whereby transactions are covered, with UMRA under Tier 4 Microfinance and Money Lenders Act,’ says Tusuubira.

Tusuubira envisions curtailing fraud, with a system that identifies clients with a unique identification code and where the various financial systems communicate with each other and track transactions of any kind.

The post Microfinance Regulator Boss Warns Money Lenders Against Violating Client’s Privacy appeared first on The Cooperator News.

Kabaka’s Call Shows Buganda Kingdom Cooperative Ideology Unfaltering

The unfaltering effort of the Buganda Kingdom to push for cooperatives as the engine for development of the country came to fore yet again yesterday when Kabaka Ronald Mwenda Mutebi II asked government to restore cooperatives.

Speaking at his 26th coronation anniversary at Nkumba University playground, the Kabaka narrated that the inception of cooperatives in Singo and Buddu county in Masaka in 1913 propelled coffee and cotton farmers into prosperity when they started saving with cooperative societies.

He called on his subjects to return to organising themselves into cooperatives instead of waiting for government to invest on their behalf.

The history of the Kingdom’s economic power and that of cooperatives in Uganda is closely intertwine. It was in Mubende that the first cooperative, Kinakulya, was formed by Baganda farmers who had been exploited enough by the British colonial masters assisted by the shrewd Indian community. They wanted to add value and trade their own cotton without the cartels created by the imposters of the time.

In 1923, the colonial administrators threatened to uproot coffee trees of a one Yisaga Yaliakumanyi, a Muganda farmer from Masaka in Buddu county, arguing that the trees would harm the cotton plants. Cotton was a commodity that the colonialist had preferred for the farmers then.

In response, three Baganda farmers, Paulo Balituma, Jemusi Biriko and Zakayo Mutetika, held a meeting to address the problems the farmers who were forcefully being taken off their own Shambas for community compulsory projects. It is at this meeting that the Baganda Growers Association was formed to represent the views of the framers to the Kabaka for intervention.

Ssekabaka Daudi Chwa II, grandfather of Kabaka Ronald Mutebi II, was very pleased with the formation of the association. He gave it his blessings. Kabaka Chwa II then spread word encouraging the formation of cooperative associations, which were then federated at Saza (county) level to perform coordination and advisory roles to famers.

Going forward, Uganda’s economy progressed largely because the Kingdom had conspicuous cooperative societies commanding the cotton and coffee markets.

Prior to Uganda’s independence, Ignatius K Musazi, along with members of the Uganda African Farmers’ Union, had approached Ssekabaka Mutesa II and prayed for the king to support the farmers in their cooperatives to gin their own cotton and also sell their produce wherever they wished. These pressures yielded such that in 1949, the Buganda government acquired Ngogwe Ginnery and leased it to Uganda Growers Cooperative Union.

Buganda Kingdom would continue to bask in meadow of several successful cooperatives like West Mengo, East Mengo, Wamala, Masaka unions under which belonged thousands of primary cooperative societies. Later, these cooperatives played an instrumental role in the success of the NRA rebellion whose battlefield was in Luwero Triangle, home for many of these cooperatives.

At the 26th Coronation of Kabaka Mutebi II, it was natural that the King would reminisce the golden days of Buganda’s economy, he did not forget the anchor or the success and strength that was—cooperatives. The king was unrelenting in carrying on the kingdom’s long tested strategy of having its members working and collectively confronting socio-economic challenges through cooperatives.

In recent times, the Kingdom’s Ministry of Trade, Industry and Cooperatives has taken up the revitalisation of cooperatives with promising results in the aspects of agroforestry, coffee farming, among others.

Times have changed but the challenge remains the same. Will the government heed the call from the Kabaka and move to revive cooperatives? Or can farmers pick inspiration from this history and go it themselves once again?

The post Kabaka’s Call Shows Buganda Kingdom Cooperative Ideology Unfaltering appeared first on The Cooperator News.