At least 26 money lending companies are at the risk of facing closure by Mbale city authorities after failing to adhere with government directives on the use of National Identification cards(ids) as collateral or mortgages for loans .
This was revealed by Milly Lornah Kharonah commercial officer Mbale City yesterday while launching Unifi microfinance Mbale branch located Republic street, Industrial city division in Mbale city.
Kharonah said that the team shall collaborate closely with security operative like Uganda Police to conduct thoroughly investigations and if any culprit found In the mess they will be kicked out of business and even arrested following their engagement in illicit practice of using National IDs as collateral for loans.
She further said that Mbale city being a commercial center has a numerous microfinance centres , banks and money lending companies hence fraudsterers take chance to cheat on ugandans .
Kharonah added that Uganda Microfinance Regularity Authority (UMRA) the government agency under ministry of finance which regulates all financial institutions passed a directive of stopping all financial institutions from withholding personal requirements national identification card , ATM, land titles among others before offering someone a lone.
"My office has received several out cries from locals claiming that some money lending companies are have gone a head withholding their IDs,ATM cards and land titles before offering them loans which she regarded as illegal" Kharonah said .
She confirmed that soon in undisclosed dates security operatives will run a crackdown to close all those money lending institutions since they are working out side the law.
Nikki Louw the country manager of Unifi microfinance institution appreciated city council for the cooperation and they intend to extend the branch office in Mbale to bring services near to people of Bugisu.
Louw added that most civil servants want to get loans and solve their problems but they fear to go into banks since they fear for high interest rates but their financial institution has cut interest rates to favour them.
Martha Acheng the Unifi microfinance Mbale branch manager urged people of Bugisu and mbale city to welcome the financial services center such that it can solve their financial related problems.
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