finance 18 August 2026 Daily Monitor (Uganda)
Uganda Eyes Stricter Rules for Digital Lenders Amidst Financial Inclusion Surge
As Uganda's financial inclusion rate climbs, the government is moving to regulate digital lending platforms due to concerns over exploitative practices and borrower protection. The Ministry of Finance acknowledges the benefits of increased credit access but emphasizes the need for stronger oversight. Source: https://www.monitor.co.ug/uganda/news/national/govt-moves-to-tighten-regulation-of-digital-lenders-as-financial-inclusion-rises-5561784
Uganda is preparing to enhance its regulatory framework for digital lending platforms, a move prompted by the significant rise in financial inclusion across the nation. State Minister for Finance, Shartsi Kutesa Musherure, highlighted that while financial inclusion has grown from 70% in 2009 to 81% in 2023, with a target of 85% by 2028, this expansion brings new risks.
The increased accessibility to credit, particularly through mobile money and online platforms, has led to concerns about predatory lending, exorbitant charges, aggressive debt collection, and the safeguarding of personal data. These issues necessitate a more robust consumer protection strategy, according to the Ministry of Finance.
Digital lending has seen substantial uptake, with mobile money platforms facilitating Shs2.75 trillion in borrowing during the year ending December 2025. Minister Musherure pointed out that while digital loans offer convenience, they also present challenges that require immediate attention from regulators.
The government intends to strengthen supervision of Tier IV microfinance institutions, improve the governance of SACCOs, and close regulatory loopholes concerning digital lending. These efforts are crucial to ensure that the benefits of financial inclusion do not come at the expense of vulnerable borrowers.
Discussions surrounding these regulatory enhancements took place during a retreat involving the Ministry of Finance and parliamentary committees. The aim is to foster closer cooperation and address potential legislative and budgetary needs to implement stricter oversight effectively.
Additionally, the government is evaluating the sustainability and monitoring of its financial inclusion programs like the Parish Development Model and Emyooga, focusing on effective loan recovery and ensuring these initiatives lead to lasting economic transformation. The Bank of Uganda reported an 8.8% growth in private sector lending by financial institutions in the year ending June 2025, underscoring the expanding financial landscape.