The bank of uganda lowered its benchmark lending rate to 8% during its april 2020 meeting, in a bid to cushion the coronavirusinduced deterioration in macroeconomic conditions and in order to ensure adequate access to credit and the normal functioning of financial markets consequently, the countrys economic growth is seen slowing drastically in the second half of 20192020 to 34% from a. However, the regulation of saccos under the tier 4 microfinance and money lenders act, 2016, is a very big obstacle to cooperative development. The survey finds that administrators are well aware of the law s provisions but overwhelmed by case. However, obtaining the money lender license through a corporate body is more advisable. In uganda money lending business took its roots during colonial times and the moneylenders act cap 273 was transplanted from england. Uganda microfinance regulatory authority wikipedia. Money lenders uganda microfinance regulatory authority. Act means the tier 4 microfinance institutions and money. Another reader brought it to my attention the fact that uganda has a money lenders act which commenced in january 1952. Lending rate for uganda from international monetary fund imf for the international financial statistics ifs release. The national assembly passed the 2016 act called microfinance institutions and money lenders act of 2016, act, enacted on july 2016 by the president of the republic. The parliament of the republic of uganda enacted a new law the tier 4 microfinance institutions and money lenders act 2016, act no.
Legislation online uganda legal information institute ulii, uganda pdf consulted on 20170526. Money lenders act, 2000, puts a strict bar against carrying out of such business without obtaining license under section 4. Section 84 b of the the tier 4 microfinance institutions and money lenders act, 2016 makes it an offence punishable by a fine of two hundred currency points for a person to carry on business in a name or at any place other than the name or address specified in the money lending licence. The proposed money lenders act should cover the following concerns. Proper documentation is essential in your business to keep track of the money flow. The tier 4 microfinance institutions and money lenders act, 2016. The tier 4 microfinance institutions and moneylenders act, 2016 is now effective. The authority offices are located on wing b of rwenzori towers ground floor plot 6. To start a money lending business, youll need to draft a business plan and obtain the necessary licenses by completing the paperwork required by your state. Names of places of business in uganda and start date and the number of years each has been established and has conducted or carried out. However the money lenders act is unequivocal on this. Uganda new law to strengthen saccos, rein in loan sharks. Moneylender means a company engaging or intending to engage in money. Tier 4 microfinance institutions and money lenders act 2016 that came into force on july 1, requires lending institutions in.
Act 18 tier 4 microfinance institutions and money lenders. Knowledge of fact in relation to particular transaction 7. Regulations are issued as statutory instruments sis. An act to provide for the licensing, regulation and supervision of microfinance business in uganda and to provide for matters connected with or incidental. The help of a lawyer will make this a much easier task. The licence automatically expires on 31st december of every year. List of money lending and loans companies and services in kampala uganda. It says that for a person to operate a money lending business, he or she must take out a money lenders licence for a period of one year. The tier 4 microfinance institutions and money lenders. A similar law is needed to protect poor borrowers from fangs of money lenders. In 2016, uganda reformed its laws by the enactment of the tier 4 microfinance institutions and money lenders act, 2016 the act.
Act 1 companies act 2012 start a business in uganda with. Tier4 institutions are those that do not accept financial deposits and are not under the. For example, the new microfinance and money lenders act provides for amendments to the microfinance deposit taking institutions act 2003 through which bou regulates mdi institutions with the view to giving bank of uganda ultimate control over big saccos. How to start a money lending business with pictures. Money lending acts across the former british empire all share the same roots. Certificate required for grant of moneylenders licence. Licence means a money lending licence referred to in section 783 of the act. In pursuant to sections 5, 202 and 362 e of the financial services act of bhutan 2011, the royal monetary authority of bhutan hereby adopts the private money lending rule and regulation 2016 to establish proper systems of permitting and regulating private money lending businessin bhutan. Provisions as to bankruptcy proceedings for moneylenders loans. Factors constraining the implementation of the money.
The law, tier 4 micro finance institutions and money lenders act 2016, that took effect on july last year is the law governing money lenders, and is expected to put an end to briefcase. What should be done to ensure that more ugandans save money in banks. The money lending law of the various states in nigeria regulates money lending business operation. Service hours of the money lenders sectionmonday to friday 8. Agreement giving power of distress by way of security to be instrument 4. Uganda interest rate 20112020 data 20212022 forecast. Your business plan will need to include the types of loans you want to make, such as payday or. Classification of tier 4 micro finance institutions. Printed by uppc, entebbe, by order of the government. In exercise of the powers conferred upon the minister by section 112 of the tier 4 microfinance and money lenders act, 2016 these regulations are made this 28th day of february, 2018. To understand and appreciate the importance of registration for private moneylending, it is necessary that we. Suspension and forfeiture of moneylenders certificates.
Starting this kind of business takes a lot of effort and money as well. Microfinance institutions and money lenders under the. The 1900 act was replaced by the moneylenders act 1927. The purpose of the act was to legitimize and build confidence in microfinance institutions saccos, selfhelp groups, nondeposit taking and community based microfinance institutions and money lenders who. This page provides forecast and historical data, charts, statistics, news and updates for uganda lending rate. The act which establishes the uganda microfinance regulatory authority umra also provides for the licensingregistration and regulation of all tier 4 micro finance. Platinum credit limited is a micro finance company licensed in uganda under the companys act, founded in 2002 with a vision to provide emergency loans to all civil servants, employees of selected private sector companies and business people through our newest product called. The tier 4 microfinance and money lenders money lenders regulations, 2018.
Legal alert uganda new regulations on money lending. Makerere university students operate unregistered money. A money lending license in nigeria can be granted to an individual or a corporate body. Legal alert new regulations on money lending aln uganda. Act tier 4 microfinance institutions and money lenders act 2016 the tier 4 microfinance institutions act and money lenders act, 2016 arrangement of sections section part ipreliminary 1. Names to be stated on documents issued by moneylenders. An act to make provision with respect to persons carrying on business as. Act 18 tier 4 microfinance institutions and money lenders act 2016. The purpose of the act was to legitimize and build confidence in microfinance institutions saccos, selfhelp groups, nondeposit taking and community based microfinance institutions and money. However due to laxity in supervision money lenders are actively. It fragments the licensing of saccos to three separate legal regimes and due to the continued delay to make regulations, saccos in uganda are. Application for a money lenders licence by company 3 application by a company for a licence 5 statement in support of an application by a company for a licence sis1 supplementary information sheet application by a company for a money lenders licence. The tier 4 microfinance institutions and money lenders act, 2016 an act to establish the uganda microfinance regulatory authority.