COSASE Chairperson Muwada Nkunyingi

By: Sarah Achen

Mobile Telecommunications Companies Airtel Uganda and MTN Uganda have denied requiring customers to provide guarantors when accessing mobile loan services, and rejected allegations that they deduct money from customers’ accounts without their consent.

The clarification follows complaints received by Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) from members of the public over alleged unauthorized deductions from their mobile money accounts and concerns over the operation of unlicensed online lending applications.

Appearing before the committee, chaired by Kyadondo East MP Muwada Nkunyingi, Airtel Mobile Commerce Uganda Managing Director Japhet Aritho and MTN General Manager for Corporate Services and Company Secretary Dennis Kakonge said their mobile lending products are unsecured and therefore do not require customers to provide guarantors.

Budadiri East MP Julius Nakiyi called on the Bank of Uganda and relevant industry stakeholders to establish clear parameters for digital lending platforms, including mechanisms capable of identifying and addressing providers charging excessive interest rates.

Ndorwa West County MP Elab Naturinda also urged the Bank of Uganda, MTN and Airtel to take action against unregulated online lending platforms, saying Ugandans are increasingly being exposed to potentially exploitative lending practices.

The telecom companies told the committee that there is a need for centralized regulation of online lending applications to strengthen consumer protection and safeguard the integrity of Uganda’s financial sector.

MTN and Airtel further clarified that they are not licensed financial institutions that lend money directly. Instead, they provide platforms through which customers can access credit offered by licensed lending companies.

The companies also proposed that the Uganda Communications Commission (UCC) consider blocking unlicensed online lending applications operating in Uganda.

They further called for the committee to obtain evidence from the relevant lending companies, investigate alleged unauthorized deductions on a case-by-case basis, strengthen mechanisms for consumer redress and promote coordinated regulatory guidance among agencies responsible for digital financial services.