By Mike Rwothomio
Zombo quick financial money lenders, stuck with hundreds of national identity cards taken as collateral for loans in Zombo, have been directed to take back their client’s national identity cards.
The directive came on March 19, 2025, in a meeting convened by Zombo district security committee with operators of financial money lenders at Paidha town council, to harmonize their working relationship with the community through the existing laws guiding their operation.
Addressing Journalists after the meeting, Bruno Manano, the assistant resident district commissioner of Zombo, gave the money lenders a two days’ ultimatum to give back the client’s identity cards.
“We have convened this meeting to ensure the money lenders return confiscated national identity cards to the owners, we are giving them up by Friday. People are failing to access services because their identity cards are confiscated, “Manano said.
The Money Lenders Regulations, Statutory Instrument No.8 of 2018, expressly prohibits the demand or acceptance of a national identity card or other document establishing the identity or nationality of the holder as collateral for any money advanced to a borrower as a loan.
Assistant RDC Manano also warned locals against depositing their identity cards as collateral for loans, adding that the practice, which is totally unlawful, is circumventing the community from accessing key services like PDM funds, Emyooga, amongst others.
A section of leaders in Zombo have urged government intervention through the regulation of interest rates charged by money lenders aims to address consumer protection concerns and inflationary tendencies, as many licensed and unlicensed lenders impose exorbitant interest rates ranging from 10% to 30% per month.
Over the years, Uganda has witnessed remarkable growth in Savings and Credit Cooperative Organizations (SACCOs), commercial banks and financial money lenders which are acting as vital financial service providers for individuals and communities.
In Zombo, over 20 quick financial money lenders are spread throughout the community, offering loans to the community with limited red tape. Many financial money lenders commonly known as “Now Now”, reportedly use client’s identity cards as collateral for loans.
The challenge comes in when the clients default on the pay back terms and conditions, upon depositing their national identity cards as collaterals.
At the meeting, Robert Musinguzi, working with Agafi finance in Paidha town council, acknowledged some of the progress and challenges made in their businesses, calling upon locals to take back their national identity cards from their offices.
He pledged cooperation with government and community in the execution of their business undertakings in the area.
The money lenders claim many clients are failing to take back their IDs, adding that they are going to return them back to the respective owners as directed.
Songa Biyika Lawrence, the MP for Ora County, in a recent interview with this Publication highlighted the benefits of locally owned Savings and Credit Cooperative Organizations (SACCOs), assuring of his maximum support.
Esther Afoyochan, the woman MP of Zombo, speaking during a recent function organized by Catholic Women Association of Paidha Catholic Parish at Oturgang Mission, voiced Concerns over rampant confiscation of national identity cards by financial money lenders to act as collateral for loans.
Afoyocan who called for President Museveni’s intervention over the matter, expressed concerns over the widespread practice, saying “many of our people may not vote in the coming elections because Now Now has confiscated their ID’s”
Many local leaders argue that the financial money lenders, commonly known as (Now Now), have stringent repayment policies, propelling many people, especially women to underperform or flee due to distress.
Constantine Omwon, the LCIII chairperson Nyapea Sub county shared that the unregulated operation of quick money lenders has forced people most especially women out of their marital homes due to multiple loan borrowing.
The high rates are often driven by factors such as a lack of financial literacy, desperate borrowing, and insufficient transparency. As a result, individuals have lost their property to money lenders and other lenders.
The practice of National Identity cards confiscation by money lenders continues unabated in Zombo, notwithstanding existing laws, including Article 29(2)(c) of the Constitution and the Registration of Persons Act, that prohibit the unauthorized possession or confiscation of National ID.
Sunday Omirambe, an area resident of Jangokoro Sub-County, also an aspirant for Okoro County MP seat reasons that, ” many people find it easy to access funds from money lenders because they don’t have so many bureaucracy like other loans from banks”
Omirambe also reasoned that the quick financial money lenders should use other properties as collateral instead of national identity cards.
Last year, the Minister of Finance, Planning and Economic Development issued a statement, containing capping the maximum interest moneylenders can charge at 2.8% per month or 33.6% per annum. This is in line with the Legal Tier 4 Microfinance Institutions and Money Lenders Act, Cap. 61 – Prescription of Maximum Interest Rate.
Speaker Anita Among last year demanded that the Minister of Finance, Planning and Economic Development present regulations to operationalize the Tier IV Microfinance and Money lenders Act to curb money lending interest rates.
Local residents react
Jerose Mandhawun, a resident of Zingili cell said, “we are going to money lenders because they don’t delay giving us money, our IDs are all with them”
Comfort Pimer , a vendor from Paidha main Market said, ” I registered for PDM 2 -years ago and up to now, I haven’t received anything, I rather go for money lenders that don’t delay giving us money”
A money lender is defined under the Act as a company that has been issued a money lending license and for one to be licensed, they must apply and be issued a license to carry on money lending business.
Last year, President Yoweri Museveni declared war on money lenders, stating “We will crush their operations”. He cited high interest rates.
Under the Tier 4 Microfinance Institutions and Money Lenders Act, Cap. 61 (“the Act”), the Minister for Finance has the power to control interest rates and may, through consultation with the Uganda Microfinance Regulatory Authority, prescribe a maximum interest rate that a money lender shall charge.
