Ugandans Dodge Digital Loan Repayments in High-Stakes Cat-and-Mouse Game

Ugandans frequently redirect mobile money transfers to new lines or request direct withdrawals to evade repaying quick loans from telecoms and apps. The popular phrase ‘Don’t send to this number. Let me give you another one’ captures this evasion tactic, driven by fear of automated deductions wiping out incoming funds.

Mobile money has onboarded 51 million users, mostly from informal sectors, with transactions surging to 156.5 million worth Shs3.3 trillion by June 2025, per Bank of Uganda data. Yet, Wilbrod Owor of the Uganda Bankers’ Association warns that defaulters get listed on Credit Reference Bureaus, barring future credit access.

Loans from platforms like MTN MoKash and Airtel Money appeal due to instant cash and low barriers, advertised via texts, calls, and posters. High interest quickly doubles debts, prompting borrowers—from professionals to boda boda riders—to abandon SIMs or use relatives’ lines.

Personal stories highlight the strain: A journalist in Jinja struggles with a Shs2 million loan plus interest amid low salaries, while a Mbarara rider juggles six debt-laden SIMs. Defaults lead to blocked lines, harassment, and damaged credit, with some lenders accused of illegal tactics like data misuse.

Regulators push tools like Universal Loan Checker for credit checks, and MTN emphasizes responsible borrowing via partner assessments. Airtel acts as a distribution channel with improving KYC and CRB links. Economists urge avoiding pleasure spending and better oversight to curb over-indebtedness risks.

Despite growth—MTN loans hit Shs1.4 trillion by late 2024—experts flag a brewing debt crisis amid economic pressures like high living costs and unemployment.

Source: Daily Monitor (Uganda)