By Our Writer
Government has warned money lenders to desist from grabbing people’s National Identification Cards as collateral whilst they face three years in jail.
ICT and National Guidance Minister Dr Chris Baryomunsi, says the Attorney General has advised that it is unlawful and illegal to demand national IDS as collateral.
“I want to clarify to the public particularly those who are in the business of moneylending that going forward, it is unlawful and illegal to demand from the borrower his or her National ID as collateral,” Dr Baryomunsi said.
The law is not limited to moneylenders but anyone transacting in a business who does so will face the full force of the law.
Over the years, many moneylenders in the country have taken to taking national ID as collateral yet identification document is particularly crucial in a country where a passport is not acceptable in any transaction other than travels.
Most borrowers whose IDs are withheld by moneylenders cannot engage in routine activities such as buying Simcards or processing bank documents.
By law, national ID is a property of the government and this is clearly indicated on the document.
“A moneylender shall not demand or accept the following as collateral according to the law, a National Identity Card, a passport, a warrant card, or other documents establishing the nationality and identity of the holder,” Baryomunsi said.
Uganda Microfinance Regulatory Authority (UMRA) has stopped issuance of licenses for calendar year 2020 after licensing a total of 894 institutions around the country.
