finance 7 September 2026 Daily Monitor (Uganda)
COSASE Presses Bank of Uganda on Digital Lending Safeguards Amidst Rising Complaints
Parliament's Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has interrogated the Bank of Uganda (BoU) regarding consumer protection measures for digital borrowers, as concerns over predatory lending practices escalate. Source: https://www.monitor.co.ug/uganda/news/national/cosase-grills-bou-over-safeguards-for-digital-borrowers-5586998
Members of Parliament are seeking clarity from the Bank of Uganda (BoU) on the effectiveness of consumer protection in the booming digital lending sector. The Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has put the central bank on the spot to explain the safeguards in place for borrowers and guarantors, and whether lenders are adhering to established guidelines.
COSASE Chairperson Muwada Nkunyingi has called for a list of all companies licensed for digital lending, with plans to summon these entities for scrutiny of their lending and debt-collection methods. The committee’s aim is to understand why, despite BoU’s oversight, “ordinary Ugandans are not protected” from potentially exploitative practices.
Lawmakers voiced concerns over reports of individuals being listed as loan guarantors without their consent, only to discover this when debt recovery actions commence. BoU Governor Michael Atingi-Ego stated these allegations were new and required investigation, noting that BoU’s regulatory reach is confined to financial institutions, while some money lenders fall under the Ministry of Finance.
Questions also arose regarding the mandatory three-day review period for loan agreements, the clarity of loan terms in local languages, and the imposition of excessive recovery charges by lenders. BoU officials affirmed that supervised entities must provide borrowers with crucial information and a review period. However, the committee pressed on whether these rules are consistently enforced, especially for rural and mobile money users.
Governor Atingi-Ego also informed the committee that approximately Shs6 trillion in bank capital is currently tied up in legal disputes, hindering financial institutions’ operations. He mentioned BoU’s collaboration with the Judiciary to encourage mediation in commercial banking disputes, which has successfully settled over 417 cases valued at about Shs90 billion.
Further matters from the Auditor General’s 2025 report, including alleged financial losses and security breaches, were also raised, with Governor Atingi-Ego opting to provide written responses for some and deferring others due to ongoing court proceedings.