EDITOR
The Resident District Commissioner of Kanungu District, Ambroze Amanyire Mwesigye, has warned residents against engaging with illegal money lenders commonly known as “Kafuna.”
He made the remarks on Monday evening at his office at the Kanungu District headquarters following several complaints from residents who say they have been exploited by unlicensed money lenders operating in the district.
According to the RDC, anyone wishing to operate a money-lending business must first be registered and licensed by the Uganda Microfinance Regulatory Authority (UMRA) or other authorized bodies such as the Registrar of Cooperative Societies. These institutions ensure that lenders operate legally and charge fair, regulated interest rates.
While meeting the RDC, some residents who preferred to remain anonymous as investigations continue revealed that certain lenders charge interest rates of up to 20 percent or even higher.
In one case, a resident reported borrowing 500,000 shillings, but within just one year the amount had risen to about 7 million shillings due to high interest charges and penalties.
Others also alleged that when borrowers reach the final stages of repayment, some lenders intentionally disappear, only to return later claiming ownership of collateral such as land or vehicles.
Because of these complaints, the RDC warned both illegal money lenders and borrowers to avoid such risky transactions.
He further revealed that some money lenders have already been arrested in connection with the illegal operations.
Ambroze Amanyire Mwesigye advised residents who need loans to always follow legal procedures and deal with recognized financial institutions.
He noted that there are several safer options with fair interest rates, including government programs such as the Emyooga Program, the Parish Development Model, as well as private SACCOs and commercial banks.
The RDC added that investigations are ongoing to ensure that all individuals involved in illegal lending practices are brought to justice.
