Speaker threatens to cancel money-lender loan agreements with MPs over high rates
Speaker of Parliament Anita Among . PHOTO | FILE
What you need to know:
- The Speaker told Parliament on Thursday that the move is purposely to instil discipline amongst money lenders whom she accused of ‘harassing’ MPs.
Speaker of Parliament Anita Among has threatened to terminate all Memorandums of Understanding (MoUs) that various money lenders have with a section of legislators in the 11th Parliament citing high-interest rates.
The Speaker told Parliament on Thursday that the move is purposely to instil discipline amongst money lenders whom she accused of ‘harassing’ MPs.
“And money lenders who are harassing MPs with very high-interest rates, even if it’s just one day overdue, I am going to cancel those MoUs because the easiest way to get their money is from Parliament,” she said.
“I will do it because I can’t afford to have MPs every time in court, especially those who are dealing directly with Parliament, they must behave,” Ms Among added.
Her caution was triggered by concerns of displeasure raised by the Vice Chairperson of the Legal and Parliamentary Affairs Committee, Mr Yusuf Mutembuli, who noted that the government complains about why the Ministry of Finance had not compelled the money lenders to adhere to Section 90(1) of Tier 4 Microfinance Institutions & Money Lenders Act, 2016.
Provisions under this section define the boundaries within which outlets such as those run by money lenders ought to charge interest on loans dished out. Section 90 (1) stipulates that “the Minister may, in consultation with the Authority, by notice in the Gazette, prescribe a maximum interest rate which a money lender shall charge.”
Additionally, Section 90 (2) states that “a money lender who charges an interest that is higher than the maximum interest rate prescribed by the Minister commits an offence and on conviction, is liable to a fine not exceeding 50 currency points and the court may, in addition to the fine order that the money lender’s licence be cancelled and the money lender pays the borrower any money paid in excess as a result of the interest rate charged.”
Mr Mutembuli (Bunyole East) noted that this provision is not being adhered to and therefore tasked the State Minister of Finance In Charge of General Duties who was present in Parliament at the time to respond on the issue.
“As you are aware, most of our colleagues have been arrested, taken to prisons because of unregulated interest rates. My question to the Minister is, when is he going to come up with the maximum interest rate that the money lenders must charge because this is how we are going to protect Ugandans. Otherwise, we have left money lenders charging 150 per cent, others are charging 300 per cent because section 90 hasn’t been invoked,” he said.
In response to the matter, Mr Musasizi said: “Yes I am aware because I enacted it. What I need to follow up is whether the instrument was worked on or not and I report back to the House.”
