The Ugandan National Assembly had considered the operation of all micro-finance institutions operating in the territory of the country. These institutions while supporting the government in promoting development of small and medium enterprises need to be regulated.
The National assembly passed the 2016 Act called Microfinance Institutions and Money Lenders Act of 2016, “Act”, enacted on 13 July 2016 by the President of the Republic.
The Act repealed the Money Lenders Act, Cap. 273. It specifically regulates the operation of Group 4 of the lending financial institutions.
In fact, one of the main objectives of the Act is to facilitate to this group to ensure the funding of individuals to promote social and industrial development of the country; and build confidence between investors, consumers and financial institutions.
However, the Uganda Microfinance Regulatory Authority was established. The body has the right to acquire, dispose of the movable and immovable property. The permanence of this authority is provided by the succession of members for replacements as defined by the Act. This authority shall have a seal by which it identifies its decisions and this seal should be in a form determined by the board of the governing body. The decisions and commitments should be in the name of this body, not individuals working there. The signatures of chairperson and the secretary will confirm any commitment on behalf of the Regulatory Authority.
Therefore, any effort to extend loans or financing some development projects should obtain prior authorization of this body, namely the “The Uganda Microfinance Regulatory Authority.”