{"id":121857,"date":"2026-04-11T11:07:52","date_gmt":"2026-04-11T11:07:52","guid":{"rendered":"https:\/\/www.africa-press.net\/uganda\/all-news\/moneylenders-reject-predator-label-seek-policy-change"},"modified":"2026-04-11T11:53:13","modified_gmt":"2026-04-11T11:53:13","slug":"moneylenders-reject-predator-label-seek-policy-change","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/uganda\/all-news\/moneylenders-reject-predator-label-seek-policy-change","title":{"rendered":"Moneylenders Reject &#8216;Predator&#8217; Label, Seek Policy Change"},"content":{"rendered":"<p><span style=\"color: #ff6600\"><strong>Africa-Press &#8211; Uganda. <\/strong><\/span><b>Uganda\u2019s moneylending industry is pushing back against what it calls a sustained campaign of public vilification, even as its own leaders concede that rogue operators within the sector have fueled the very mistrust now threatening its legitimacy.<\/b><\/p>\n<p>At their Annual General Meeting held in Kampala on April 9, 2026, leaders of the Moneylenders Association of Uganda struck a careful balance between defense and admission, arguing that while licensed lenders are being unfairly targeted by politicians and the public, internal malpractice remains a serious and unresolved problem.<\/p>\n<p>\u201cWe are being unfairly portrayed as bad,\u201d said the Association\u2019s General Secretary, Medard Muganzi, moments after addressing members. \u201cYet the reality is that the challenge is coming from two sides.\u201d<\/p>\n<p>On one hand, Muganzi said, borrowers who default on loans often turn to public sympathy, casting lenders as exploitative in a narrative that quickly gains political traction.<\/p>\n<p>\u201cPeople borrow genuinely, but when they fail to service their loans, they resort to tarnishing the name of the money lender,\u201d he said, drawing comparisons with commercial banks whose recovery processes rarely attract similar outrage.<\/p>\n<p>\u201cBanks foreclose and recover their money, and it is understood. But when a money lender does the same, it becomes a public issue.\u201d<\/p>\n<p>Muganzi did not attempt to absolve the industry entirely. In a rare admission, he acknowledged that some lenders are operating outside the law, cutting corners in ways that expose borrowers to abuse and ultimately damage the credibility of compliant players.<\/p>\n<p>\u201cSome are signing sale agreements instead of following the proper legal process under the Mortgage Act,\u201d he said.<\/p>\n<p>\u201cThat means when a client defaults, they take over property without due process. This is wrong, and it affects all of us.\u201d<\/p>\n<p>It is this dual reality, external pressure and internal indiscipline, that now defines the sector\u2019s crisis.<\/p>\n<p>Licensed lenders argue they are paying the reputational price for unregulated actors, even as the public sees little distinction between the two.<\/p>\n<p>Compounding the tension is a regulatory framework the Association describes as selectively punitive.<\/p>\n<p>Muganzi singled out the government-imposed interest rate cap of 2.8 percent per month, questioning why similar restrictions do not apply to other lenders operating in Uganda\u2019s expanding digital and banking ecosystem.<\/p>\n<p>\u201cYou find telecom companies charging up to nine percent per month, and banks are also above that, but it is only money lenders who are capped,\u201d he said. \u201cThat is unfair targeting.\u201d<\/p>\n<p>The Association is now seeking to reposition itself not just as a lobby group, but as a self-regulating authority capable of cleaning up the sector from within.<\/p>\n<p>Muganzi revealed ongoing discussions with the Ministry of Finance to make Association membership a prerequisite for licensing, a move that would effectively give the body enforcement leverage over its members.<\/p>\n<p>\u201cWe know government cannot regulate all the players, there are about 60,000 microfinance entities,\u201d he said.<\/p>\n<p>\u201cSo we want to bring them under one umbrella and regulate ourselves.\u201d<\/p>\n<p>He also called for the Association to be represented on the licensing board, arguing that the current process is opaque and slow, even for compliant applicants.<\/p>\n<p>\u201cPeople apply with all the documentation, but getting a license becomes a struggle. We believe our presence would improve the process,\u201d he said.<\/p>\n<p>Internally, the Association is attempting to rebuild credibility after years of weak governance.<\/p>\n<p>Muganzi disclosed that the current leadership found no audited accounts upon taking office, but has since instituted financial controls and secured a clean audit opinion.<\/p>\n<p>\u201cWe now have proper systems like financial policies, procurement guidelines, and accountability structures,\u201d he said. \u201cThat is the foundation for restoring trust among our members.\u201d<\/p>\n<p>For the Association\u2019s Chairman, Jonan Kandwanaho, the stakes go beyond reputation\u2014they are existential. The sector, he argued, sits at the center of Uganda\u2019s financial inclusion gap, serving millions who remain locked out of formal banking systems.<\/p>\n<p>\u201cAbout 70 percent of Ugandans, especially businesspeople, are not banked,\u201d he said. \u201cThat means they depend on lenders for survival and growth.\u201d<\/p>\n<p>But Kandwanaho also acknowledged that access without structure has created a breeding ground for exploitation.<\/p>\n<p>His prescription for 2026 is built on three pillars: enforcing compliance among members, aggressively reshaping public perception, and restructuring how lenders themselves access capital.<\/p>\n<p>\u201cWe are aligning to the law and ensuring our members lend at the right rates,\u201d he said, distancing the Association from operators charging as much as 30 percent interest.<\/p>\n<p>At the same time, he signaled a shift toward a more assertive public relations strategy. \u201cWe need to speak for ourselves. The narrative must change,\u201d he said.<\/p>\n<p>Perhaps the most ambitious proposal is the creation of an internal financing pool, a system through which lenders can share resources and access cheaper capital, reducing their reliance on expensive funding streams that are often passed on to borrowers.<\/p>\n<p>\u201cIf we can lend among ourselves at lower cost, we can extend cheaper credit to the public,\u201d Kandwanaho said.<\/p>\n<p>Yet beneath the reform agenda lies an unresolved contradiction. The industry is calling for less regulatory pressure in some areas, particularly interest rate caps, while simultaneously proposing tighter control mechanisms within its own ranks.<\/p>\n<p>Whether this balance can be achieved remains uncertain.<\/p>\n<p>For now, the Association is betting on mobilization and unity, urging all lenders, licensed or not, to join and operate within a common framework.<\/p>\n<p>\u201cWe want to move away from being seen as sharks,\u201d Muganzi said. \u201cWe want to be recognized as a legitimate part of the economy.\u201d<\/p>\n<p>That transformation, however, will not be won at press conferences or annual meetings. It will be tested in courtrooms, in loan agreements, and in the everyday experiences of borrowers navigating a sector where trust remains in short supply.<\/p>\n<p><strong>For More News And Analysis About <span style=\"color: #ff6600\">Uganda<\/span> Follow <span style=\"color: #ff6600\">Africa-Press<\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Africa-Press &#8211; Uganda. Uganda\u2019s moneylending industry is pushing back against what it calls a sustained campaign of public vilification, even as its own leaders concede that rogue operators within the sector have fueled the very mistrust now threatening its legitimacy. At their Annual General Meeting held in Kampala on April 9, 2026, leaders of the [&hellip;]<\/p>\n","protected":false},"author":84,"featured_media":121856,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[234],"class_list":["post-121857","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-uganda"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.1 (Yoast SEO v27.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Moneylenders Reject &#039;Predator&#039; Label, Seek Policy Change - Uganda<\/title>\n<meta name=\"description\" content=\"Uganda\u2019s moneylending industry is pushing back against what it calls a sustained campaign of public vilification, eve ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/uganda\/all-news\/moneylenders-reject-predator-label-seek-policy-change\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Moneylenders Reject &#039;Predator&#039; 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