The Uganda Microfinance Regulatory Authority (UMRA) has issued a public notice highlighting the proliferation of illegal online lending apps in Uganda, urging the public to refrain from engaging with these unauthorized entities.
These apps operate outside the legal framework established by the Tier 4 Microfinance Institutions and Money Lenders Act, 2016, and the newly introduced Digital Lending Guidelines of 2024.
UMRA was established to regulate and supervise microfinance institutions and money lenders in Uganda. The authority’s mandate includes ensuring compliance with consumer protection laws and safeguarding borrowers from predatory lending practices.
However, the rise of unregulated online lending apps has raised significant concerns regarding consumer data privacy, exorbitant interest rates, and unethical recovery practices.
Recent reports indicate that these unauthorized lenders employ aggressive tactics, including harassment and intimidation, to recover debts. Many victims have shared harrowing experiences of being shamed on social media or threatened with exposure to their contacts, leading to emotional distress and reputational damage.
List of illegal online lending apps in Uganda
UMRA has identified several online lending applications that are operating illegally in Uganda. The following is a comprehensive list of these apps:
- Flypesa
- Banana App
- Loango
- Nile
- Gloan App
- Boom Loan
- Mpacash
- Cashpulse
- Credit Lab
- Flowerloan
- Wind-money
- Lever Credit
- Cashmate
- Ezee Loan
- Kasente
- Sunlit
- Cashflow
- Moji
- Ozzy Money
- Mumu Money
- Kasquick
- More Pesa
- Muno
- My Loan
- Real Cash
- Star Loan
- Get Cash
Risks associated with illegal lending apps
The illegal operations of these lending apps pose several risks to consumers.
Many of these apps charge exorbitant interest rates, often exceeding 30% per month, which can lead to a cycle of debt for borrowers.
That said, these unauthorized lenders frequently access personal data without consent, violating the Data Protection and Privacy Act of 2019. This includes accessing call records and using personal contacts to pressure borrowers.
Several reports indicate that these apps employ aggressive collection methods, including harassment through social media and threats to involve borrowers’ contacts. Also, many of these apps do not have a physical presence or registered business name, making it difficult for borrowers to seek redress in case of disputes.
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