Prime Minister Robinah Nabbanja has accused telecommunications company MTN of exploiting Ugandans through its mobile lending services, describing the 10 per cent monthly interest charged on loans as theft.
Nabbanja said the high interest rates charged through mobile lending platforms were worsening the financial burden on borrowers. She added that the practice had become so widespread that some Ugandans could no longer receive money sent to them because of outstanding mobile loan obligations.
“MTN lend people at 10% per month, which is theft. This level of theft must be checked. I’m a Ugandan who graduated from poverty, so I can’t keep quiet when they’re stealing from people. I’m not saying this in bad faith. It has become a common practice when you want to send someone condolence money and they tell you, don’t put it on this number because MTN is demanding money from them,” Nabbanja said.
The Prime Minister also expressed concern about what she described as a growing culture of unnecessary borrowing among Ugandans, arguing that some people were increasingly taking out loans even when they could meet their financial needs without borrowing.
“There’s a habit I genuinely want to talk about. People in this country are becoming indebted, even those who are able. MTN is lending everyone. You want to send someone condolence money, then someone tells you, don’t put it on this line. It is affecting everyone because there’s a habit that has developed of people borrowing even when they’re able,” she said.
However, Leader of the Opposition Joel Ssenyonyi criticised Nabbanja’s remarks as insensitive, questioning how the Prime Minister could determine whether borrowers were financially capable of meeting their needs without taking loans.
“How do you know they are able?” Ssenyonyi asked.
He accused the government of appearing to ridicule financially struggling Ugandans while repeatedly seeking Parliament’s approval to borrow money.
Nabbanja’s remarks come amid growing scrutiny of mobile lending services and the high cost of credit in Uganda.
MTN operates MoKash, a mobile financial service that enables subscribers to access quick loans without providing physical collateral.
Beyond mobile lending, the Prime Minister also raised concerns about moneylenders who allegedly disguise loan agreements as land-sale transactions, putting borrowers at risk of permanently losing their property when they fail to repay their debts.
“Instead of writing that you have borrowed, or somebody has lent you money, they say you have sold part of the land,” Nabbanja said.
Her remarks come against the backdrop of government efforts to regulate moneylending businesses and protect borrowers from exploitative lending practices.
Under Legal Notice No. 21 of 2024, licensed moneylenders are prohibited from charging interest exceeding 2.8 per cent per month, equivalent to 33.6 per cent annually.
At that rate, a person borrowing Shs100,000 would pay a maximum of Shs2,800 in interest for one month, calculated on the amount actually advanced and subject to the applicable interest-calculation rules.
Finance Minister Henry Musasizi has also warned that moneylenders charging interest above the legally permitted monthly ceiling risk having their operating licences revoked.
The government has urged borrowers to report lenders who violate the prescribed interest limits and seek legal redress.
